US Sees Cooling, not Collapsing Housing Market

U.S. housing may already be cooling but it should level off at high levels and ought not undermine the country's economic expansion, St Louis Federal Reserve President William Poole said Wednesday.

"My hunch ... is that housing activity will stabilize and remain at a high level this year," Poole told the St. Louis Regional Chamber and Growth Association at a breakfast meeting. A copy of his speech was made available to media prior to delivery.

"I base this forecast on the belief that the FOMC (Federal Open Market Committee) will keep underlying inflation low and stable, and that the growth of real household income will recover nicely due to the waning influence of last year's spike in energy prices. Continued healthy job growth will also help keep housing conditions at a high level," he said.