Paulson: Housing Correction in ‘Months’

The Treasury Secretary thinks it will take just months, not years, for house prices to stabilize and most excesses to be washed away

by Peter Coy

Treasury Secretary Henry Paulson told BusinessWeek editors on July 21 he thinks it will take months, not years, to work through “the largest part of the housing correction.” Paulson said that while some of the excesses in housing will take "more than months" to be washed away, “The more reasonable question is: How long will it take to work through the largest part of the housing correction?” Added Paulson: "I think there is a reasonable case to be made that when you look at the housing correction, the largest part of this we can work through in months."

Paulson said that once home prices stabilize, the housing sector could begin contributing to economic growth “well before we’re through all the issues in housing.” He said, “At the heart of the economic issue is housing.”