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Now you see the housing market slowing down because you see
higher rates are having an effect that should have an effect on

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housing prices
perhaps even fairly quickly so that prices won't necessarily

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come down. But price increases will flatten out. We're seeing
lower home sales we're seeing lower starts. So we're seeing a

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slowing in housing.
This is Bloomberg Markets. I'm creating Gupta with John Erlich.

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When you were just as the Fed chair Jay Powell testifying
earlier today before the Senate Banking Committee. And the U.S.

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isn't the only country seeing signs of a housing slowdown. He
says the topic of today's big take. Joining us now to break it

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all down is the Elaina Charlotte of our senior U.S. economist
for Bloomberg Economics. Elaine thank you as always for joining

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us. This is a conversation we've had in the markets for some
time now being priced. And you also had a Bloomberg scoop I

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should add that hundreds are being cut or reassigned in JP
Morgan's mortgage unit as housing demand begins slumping during

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this rate sir. So you can really see the effects across really
all parts of both the market and the economy. But I have to ask

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the faster the deceleration that you're seeing what are the
ripple effects they're going to see across the US economy in

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particular. Well I think the U.S. economy's pretty much
insulated from a full blown housing crisis akin to what we saw

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back in 2000
7. I think it's just

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the thing is that real estate if you look at that homeownership
within real estate is at the highest level since 1980s. You look

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at debt service ratios they're at the lowest levels. So you know
households have delivered quite a lot. So the risks to the

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financial system from the housing market are pretty low at this
point. Of course housing will slow down and it will have some

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spillover effects on consumption and so on. But that's the whole
idea of slowing demand by raising interest rates or raising

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interest rates as Chip also mentioned today.
Union interesting to hear you say that echoing some of what we

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just heard from Megan GREENE of Harvard as we look at some of
these lovely U.S. housing markets around the world based on the

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economics work that Bloomberg has done whether it's New Zealand
or Australia or here in Canada where over the last couple of

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years it has not been surprising. And somehow home markets to
see prices increased by more than 50 percent. You know there was

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a trend that started going back to the financial crisis were
more conservative Canadians who managed on the economic front

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and then saw record low interest rates for basically a decade
started to get in. So could we be in a situation where the U.S.

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navigates relatively well but has to be keeping an eye on these
global housing markets because of this uncertainty. Absolutely.

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I think yes you're right. Canada is among those countries that
potentially see the highest risks according to the analysis that

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was performed by my colleague Ross Shaw at Bloomberg Economics.
I think the U.S. is relatively safe in this environment. And

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again because I think the U.S. consumer has delivered quite a
bit relative to what we saw back in the early 2000s. So I think

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that is a really important distinction here. Also the U.S.
consumer has accumulated a lot of savings and those excess

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savings will provide some caution despite the fact that the
savings rate in the U.S. has fallen quite a bit since the peak

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we saw back during the crisis
line about 30 seconds here. I have to ask simply about whether

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or not we actually see a housing shortage continue because not
just about crimping demands on the supply side as well. How long

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does the housing shortage. Well I think the supply being short
will support housing prices to a certain extent this year

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because there's a lot of housing in the pipeline. But those
houses cannot be finished simply because they endorse windows

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you know sinks whatever because of supply shortages. So we will
not see a significant improvement on the supply side which

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should probably prevent housing prices from going down this year
at least.