Housing market shows few signs of slacking off

From the New York Times, and featured in today's Chronicle, "The housing boom in the United States has survived 11 rate increases by the Federal Reserve, and lately, it has faced increasing jawboning from Fed officials who warn bankers not to ease lending standards too far and caution homeowners that, as Fed Governor Donald Kohn said last week, "a substantial slowing in the pace of house-price appreciation seems inevitable."

"Indeed, as the current boom shows, the Fed has some trouble even slowing a boom. Long-term interest rates have not risen with the short-term rates the Fed does control, and the financial system has responded with creative mortgages that let home buyers hold down monthly payments even as the purchase price rises."

"With the Fed worried about speculative excesses in housing, it would dearly love to slow the boom without bringing on a bust reminiscent of the old days. Builders know what the Fed is saying, but so far, they believe that customers will keep lining up to buy whatever they build."