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NY Fed’s Williams says rising home prices don’t pose financial stability risks -Breaking

by Mike Robinson

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© Reuters. An “For Sale” sign was posted at a Queen Anne home near Seattle’s Space Needle. This is Washington State, U.S. May 14, 20,21. REUTERS/Karen Ducey

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(Reuters) – The U.S. is experiencing a rapid rise in home prices due to the low interest rate and the demand for housing during the COVID-19 outbreak. However, the trend doesn’t pose a risk to financial stability as John Williams, President of the New York Federal Reserve Bank, stated Thursday.

Williams indicated that although housing prices might fall later depending on preferences, credit risks are lower in the market and banks have better capabilities to deal with this kind of change than ever before.

Williams spoke in a video interview to Bund Summit participants. Williams indicated that there was a clear risk that prices for houses could fall.

“I believe it isn’t at the moment, and that there is big risk for financial stability.”

Since the outbreak of the coronavirus pandemic, home prices in America have risen by 30%. The reason is that there has been an increase in demand for homes and less inventory. Analysts are worried that the high price point could make it more difficult for some buyers to afford homes.

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