January pace of housing starts tops forecasts

Incoming Federal Reserve Chairman Ted Bernanke told Congress on Wednesday that "a number of indicators point to a slowing in the housing market." And, "given the substantial gains in house prices and the high levels of home construction activity over the past several years, prices and construction could decelerate more rapidly than currently seems likely."

Most forecasters expect the housing market will avoid a catastrophic crash. Ed Leamer, director of the UCLA business forecast, said  "It’s going to be a buyer’s market not a seller’s market — possibly  for a long period of time,"

Despite Bernanke’s and Leamer’s remarks and widespread prognostications of a housing market slowdown, January saw the highest level of housing starts in over 32 years. The Census Bureau’s newest report showed that new homes construction is at an annual pace of 2.28 million homes.

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