If Home Prices Decline, Economic Downturn & Recession May Resume

Home-Prices-Declining

According to Alan Greenspan, Former Federal Reserve Chairman, “We’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession.” Furthermore, it was indicated by Greenspan that the economic downturn might resume should US home prices continue to go down.

“It is possible if home prices go down. Home prices, as best we can judge, have really flattened out in the last year,” Greenspan said. Because of the slow economic growth and the problems with the real-estate and housing market, it is feared that the recession could take a reverse in direction and resume its stance before the economy can take a complete recovery.

The economic outlook is quite uncertain at the moment, though Greenspan anticipates that the unemployment rate will continue to remain steady throughout the rest of the year. He further mentioned the negative effects of long-term employment on bringing apart the economy, in spite of the large corporations and banks still doing very well.