A second key factor has been the slowing of house prices: One national index, which rose at close to a double-digit pace from 2000 through 2005, has slowed to show only small gains for the past several quarters, and some areas are seeing outright price declines.
As for the outlook, the Bank projects that the pace of improvement of the economy is likely to be moderate for the time being, and it judges that the risk of the economy deteriorating substantially again, the risk of the so-called “double dip,” about which market participants had expressed concern, has diminished considerably.