Industry News

Greenspan predicts real estate boom to end

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The housing boom has seen its last days, U.S. Federal Reserve Chairman Alan Greenspan said today. The Fed expects home sales to plateau in the months ahead from current highs and home prices to stop rising. "We perceive that the very strong expansion in new and existing home sales is now flattening out, and the really quite unexpected boom in home sales over recent years is unlikely to be continued," Greenspan said today during a Senate Banking Committee hearing, according to an AFP report. "Our forecast is generally flat, not in price, but in aggregate volumes. Where prices go, I'm not sure, but I could be quite surprised if they showed continued acceleration on the up side," he added. The biggest driver in booming home sales of the past few years has been record low interest rates. The Fed's monetary policy has contributed to low home loan borrowing rates by keeping the federal funds rate at historic lows. The federal funds rate, which banks charge each other overnight, is at a 46-y...