Currently, house prices are increasing at an annualised rate of about 4 per cent. Given the slowdown in house prices, the main concern now is both the rapid growth and high level of indebtedness in the economy. Total private sector credit is growing at an annual rate of about 25 per cent.
In addition to providing consumers with better information, the Federal Reserve plans to exercise its rule-making authority under the Home Ownership and Equity Protection Act (HOEPA) to address unfair or deceptive mortgage lending practices. We plan to propose rules by the end of this year that would apply to subprime loans offered by all mortgage lenders.