(Reuters). Federal Reserve Governor Michelle Bowman, Monday’s Federal Reserve Governor, highlighted a number of economic stability and stability risks posed to the housing market by pointing out that increasing demand for homes and slow growth are putting downward pressure on their prices.

Bowman stated that the shortages in materials and labor have impeded new home supply. These remarks were prepared to be delivered at a Women in Housing and Finance meeting. I expect that the housing supply problems will not reverse in the near term. This suggests that there is likely to be higher housing inflation for some time.

In her prepared remarks, Bowman didn’t address the outlook on the economy as a whole or monetary policy. Bowman did not express a single-sided concern about an increase in home prices. She also pointed out the possible strains that might result from a decrease in these prices.

Bowman stated that she closely monitors how banks handle borrowers who are in forbearance. Bowman said that servicers who fail to handle loan modifications on a large-scale and in a poor manner can affect the macroeconomy as well as financial stability. She also stated that she was “cautiously optimistic that the smooth transition of Fed-supervised banks would have no significant effect on the wider economy.

She acknowledged that there were risks. Nonbank mortgage companies pose a risk to the wider financial system as they are unable to tap into government backingstops. Bowman suggested that it is appropriate to improve data collection and strengthen oversight for such lenders. However, she expressed concerns that banks and nonbank mortgage lender are both subject to different levels and oversight.