Fed's says high potential for housing correction

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Fed's Bies says high potential for housing correction

Tue Feb 20, 2007 11:11AM EST

DURHAM, N.C., Feb 20 (Reuters) - Federal Reserve Board Governor Susan Bies said on Tuesday that there still was a high potential for a correction to occur in the housing market and said that made it hard for the Fed to assess conditions.

"There's a lot of vacant housing out there right now,' Bies said during an address at the Duke University Fuqua School of Business.

"The potential for inventory correction is still very high," she added.

While supply is hard to judge, Bies said that a downturn in demand for housing may be nearly over.

"We may be near the floor in terms of demand," Bies said.