The headline inflation rate, in terms of the wholesale price index, has declined from an average of 11.0 cent during 1990-95 to 5.3 per cent during 1995-2000 and to 4.9 per cent during 2003-07.
Thus, some part of the effect on housing demand of the retrenchment in the subprime market has likely already been felt. Moreover, indicators such as the gross issuance of new subprime and nearprime MBS suggest that the supply of nonprime mortgage credit, though reduced, has by no means evaporated.