Federal Reserve Board Chairman Ben Bernanke predicted yesterday that slowing housing construction would take about a percentage point off growth of U.S. gross domestic product in the second half of this year and limit next year’s growth as well.
Bernanke says it is difficult to tell how long the slump in construction will last because both buyers and sellers have moved to the sidelines because of the uncertainty over prices.
But Bernanke, who made the comments while speaking to a business group in Washington D.C., wasn’t totally negative about the housing market.
“I think there are some strong fundamental underpinnings that should help the housing market over the medium term,” he told the audience. “These include a good job market, strong income growth, demographics, and continued low mortgage rates.”
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