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Fed Reserve 2005 House Price Predictions

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Federal reserve model of house prices based on population trends:

http://www.federalreserve.gov/PUBS/ifdp/2005/847/ifdp847.htm

Written in 2005, this model fit data since 1969, and predicts a fall in house prices from end 2011 until 2035... of about 60%:

figure16.gif

Has anyone produced an updated graph since then?

The Ireland numbers are completely out, but that's explained by their joining of the Euro and lack of control over interest rates.

I'm pretty sure the US has fallen more sharply than in the model.

Looks like I'll be renting a while longer.

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http://economistsview.typepad.com/economistsview/2007/05/bernanke_subpri.html

Thursday, May 17, 2007

Bernanke: Subprime Mortgages not a Serious Problem

What subprime problem?:

Bernanke Plays Down Threat From Subprime Defaults, by Stephen Wisnefski and Jesse Thomas, WSJ: Federal Reserve Chairman Ben Bernanke said Thursday that the financial system can withstand the fallout from the subprime-mortgage market "without serious problems."

"We have spent a bit of time evaluating the financial implications of the subprime issues, tried to assess the magnitude of losses, and tried to determine how concentrated they are," Mr. Bernanke said in response to a question following a speech here. "There is a sense that, although there is always a possibility for some kind of disruption ..., the financial system will absorb the losses from the subprime mortgage problems without serious problems." ...

He also said he doesn't expect the subprime problems to have significant spillover to the rest of the economy. ...

Asked by an audience member about whether the Fed is concerned about risks for banks amid the spate of large private-equity deals, Mr. Bernanke acknowledged there are "some significant risks associated with the financing of private equity."

"We are looking at that. We do think it's very important for banks to be quite aware of the risks associated with working with private-equity firms," he said. ...

Facing criticism from members of Congress about lax regulation, Mr. Bernanke in his prepared remarks also promised that the Fed would do everything possible to crack down on abuses that have put millions of homeowners in jeopardy of defaulting on their mortgages. ...

There's the full speech he made in 2007 at the link.

Didn't Bernanke repeatedly say before this there was no problem? Didn't he also say house prices wouldn't fall?

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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