Housing May Sting More Than Dot.Com Bust

Study: 15 states, representing 35% of the economy, are vulnerable to a housing correction.



WASHINGTON (Reuters) - Whether it's a national bubble or just pockets of regional froth, an end to surge in home prices could inflict economic harm that would make the 2000 tech bust look tame in comparison.



Even if the market cools in only those parts of the country that Federal Reserve Chairman Alan Greenspan describes as "frothy," the U.S. has a serious problem.



If prices were merely to level off, it could subdue the property-linked activity that has stimulated spending and job growth -- crucial supports for the U.S. economy.



Based on benchmarks from a recent International Monetary Fund study comparing the stock and housing market bubbles, there are about 15 states that are vulnerable to a housing market correction. These represent about 35 percent of gross domestic product, the broadest measure of the nation's economy.
http://money.cnn.com/2005/07/01/real_estate/us_housing_market.reut/index.htm />

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