24th January 2011
He went public with his concerns to wire service Bloomberg with his comments reported in this weekend's Telegraph .
Posen told Bloomberg "You look at the difficulty many first-time buyers or younger people have in getting mortgages [and the] very low volume of transactions – these to me are things saying ‘I am much more worried about a downside risk to the housing market from here than any further appreciation."
With Posen worried in particular about a lack of mortgage lending, another Telegraph story appears to bear this out showing that many lenders are pulling their best mortgage offers.
The irony is that while Posen is attempting to resist pressure on him and fellow MPC members to raise rates, according to this report, lenders are pulling their better rates in anticipation of the MPC doing just that.
Posen also comes in for flak from some commenters who do not see why maintaining house prices is so important.
tonyg writes: "I wonder why Mr Posen sees a fall in the stock market value as a trivial "Market Adjustment" and a similar fall in the value of housing as an economic disaster. Surely they are the same thing and should be left to work through the system."
But not all experts are bearish. Henderson's chief economist Simon Ward sees glimmers of hope which makes him sound like an optimist in comparison to Posen.
He cites a number of factors but in particular points out that a recent estate agent survey from RICS, the Royal Institute of Chartered Surveys, shows that at least one measure of supply and demand points to prices being supported.
He writes: "The December RICS survey showed a net 39% of estate agents reporting lower prices, seemingly supporting the bears. Both the reported and expected balances, however, recovered while the new buyers minus sellers indicator (i.e. the difference between the new buyer enquiries and selling instructions balances), which leads prices, turned positive for the first time since December 2009.