Fed Official Says Housing Market to Weaken Further

http://www.cnbc.com/id/21876990 ^ | 11-19-07

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Minneapolis Federal Reserve Bank President Gary Stern said on Monday he expected the U.S. housing market to weaken further because of a large pool of unsold homes.

AP --------------------------------------------------------------------------------

But employment and incomes were still rising, Stern said, and that would underpin consumption.

"The adjustment in the housing market has still some way to go. The reason I say that is because of the huge inventory of unsold homes," Stern told reporters in Singapore.

"I would expect new home building to remain quite constrained. It is also true foreclosures will go up rather than down over the next several quarters," he said on the sidelines of a risk conference in Singapore.

Earlier on Monday, he told the conference that the absence of pre-emptive action on interest rates by the Fed was not behind the subprime mortgage crisis, and he warned against rushing to push through reforms during the credit turmoil.

Delinquencies May Rise

Stern said that financial markets were braced for a rise in delinquencies and would not be surprised by such data.

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[Blue Highway]

Add me to the ping list please.

[Moonman62]

But employment and incomes were still rising, Stern said, and that would underpin consumption.

I guess Mr. Stern is too important and his feelings too powerful for him to be bothered with looking at earnings reports from retailers.

[BlabItGrabIt]

Simple: Prices too high--lower them. No rocket science.

TO your point; now that granite countertops and hardwood floors are no longer the raving style, folks have more money to spend on less conspicuous consumption items. Like 58" plasmas...

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Done