Housing cooling faster than expected

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MARK AUSTIN THOMAS: The International Monetary Fund says there’s a risk of a sharp fall in U.S. housing prices. The IMF released a report today that says even the buoyant UK housing market could be in trouble. From London, Stephen Beard has more.

STEPHEN BEARD: The IMF warns that while the global economy is still growing impressively, it does face potential disaster.

The Fund describes what it calls “a cocktail of threats” in the coming year. Among them: higher oil prices, and a big downturn in the US housing market.

Other property hot spots like the UK and Australia could also suffer, but the key concern for the IMF is what’s happening in the U.S. says economist Andrew Hilton.

ANDREW HILTON: Inflation is starting to bite and to pick up in the U.S. and that could well drive interest rates up in the U.S. still further. And if interest rates in the U.S. go up still further it is quite possible that the housing market could collapse.

If the U.S. slows down suddenly, says the IMF, and imports far fewer foreign goods the rest of the world will quickly feel the effects.

In London, this is Stephen Beard for Marketplace.