ICS Magazine

Greenspan credits housing role in economic health

March 10, 2002
WASHINGTON--Federal Reserve Chairman Alan Greenspan credited the real estate and mortgage businesses with leading the country's economic recovery.

Testifying before Congress, Greenspan pointed to steady home sales during an unusually mild winter and a mortgage refinance boom fueled by low interest rates. This, he told Congress, were factors keeping the recession mild and, now, bringing it to a close.

According to the National Association of Realtors (www.realtor.org), the residential property boom has shown no signs of weakening following the brief lull in activity following the Sept. 11 attacks. The NAR recently reported sales of previously owned homes were up nearly 15 percent in January from the previous year.

Analysts attribute the demand to the desire to diversify and balance investment portfolios, taking some of the weight away from the volatile stock market and redirecting it into property and other alternatives. Additionally, the housing boom is the result of low interest rates as well as more flexible financing that affords greater homeownership opportunities to minorities, immigrants, senior citizens, and first-time buyers.

The NAR is the world's largest professional association. Founded in 1908, it has grown from its original nucleus of 120 to more than 750,000 members today.