Fed: Housing market ~ lost altitude but headed for a safe landing

WASHINGTON - The housing market, after flying high for five years, has lost altitude and appears headed for a safe landing, Federal Reserve Chairman Ben Bernanke said Thursday.

“It seems pretty clear now that the U.S. housing market is cooling,” Bernanke said. He noted that home sales are slowing as is housing construction.

“Our assessment at this point … is that this looks to be a very orderly and moderate kind of cooling,” Bernanke said.

One of the things that Bernanke and his Fed colleagues are keeping close tabs on is the extent to which a housing cool-down will slow overall economic activity.

The housing market has been a top economic performer. The sector has racked up record-high sales five years in a row. Rapid appreciation in house prices has made homeowners feel wealthy and has powered consumer spending, helping the economy move solidly ahead.

Cooling of the housing sector is expected to be a factor in slower economic growth in the months ahead.

Source: Jeannine Aversa, The Associated Press