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Federal Reserve Chairman Alan [Greenspan spoke to the American Bankers Association today [Federal Reserve]](http://www.federalreserve.gov/boarddocs/speeches/2005/200509262/default.htm) and re-visited the topic of housing. He indicated that [any decline in home prices would not necessarily be disruptive [MarketWatch].](http://www.marketwatch.com/news/print_story.asp?print=1&guid={EC0FC574-63A1-40FB-A8C7-BD54B661F017}&siteid=mktw)

Some key points from the a new study he co-authored:

* Owner-occupied homes have risen 9% on average annually.
* US housing market is a collection of local market loosely connected by mortgage rates, migration and construction capacity.
* Speculation is largely local, the fees associated with a sale are a formidable barrier.
* 14% of home purchases are second homes up from 7% in 2000.
* Less than 5% of all home mortgages have an LTV greater than 90%.
* The use of piggy-back loans is not strongly correlated with housing appreciation.
* LTV are lower in states with the highest appreciation rates.

These are interesting points made that seem to belie many of the arguments that high risk financing is causing a housing bubble.