Greenspan: Uptick in Home Prices Needed
Economic recovery depends on staunching the downward flow of home prices, says former Federal Reserve Chair Alan Greenspan.As long as home prices continue to decline, the economy won’t stabilize, he predicts.
"The bulk of conforming mortgages made since 2005 are close to being underwater," Greenspan says. "We can take another 5 percent decline in house prices without much macroeconomic impact. But if prices fall by 12 percent, more than 4 million additional home owners will be underwater.”
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