October 21 (Reuters) – Home prices in the United States are rising rapidly due to low interest rates and as people search for living space during the COVID-19 pandemic, but the trend is yet to show any Big risks to financial stability, New York Federal Reserve Bank said Thursday President John Williams.

House prices could come down later if preferences change, Williams said, but there is less credit risk in housing markets and banks are better prepared to handle this kind of change than they were. before the Great Recession.

“I think there is clearly a risk (…) that house prices will go down and I think it is a risk to the macroeconomics through traditional channels,” Williams said, speaking at a video interview broadcast to participants of the Bund summit.

“I think what it isn’t right now, at least it’s a big risk to financial stability.”

Home prices have risen more than 30% in the United States since the start of the coronavirus pandemic, driven by increased demand and a shortage of homes for sale. Some analysts fear that high prices limit affordability for first-time buyers and other groups.

Report by Jonnelle Marte; Editing by Christian Schmollinger and Kenneth Maxwell

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