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The new Fed Chief made some statements in Chicago at the federal reserve board. While he feels the housing market is slowing down given the recent appreciation in most areas and the environment of rising rates,he believes that it is a stable slow down and many markets will still experience appreciation and new homes being built will still be sold. Real Estate is a very localized industry so his comments should be seen as an aggregate or average of the national condition. He supports his opinion by citing a rise in income and job growth allowing people to afford more, which will compensate for the rise in housing prices. Similarly to his predecessor, Alan Greenspan, Bernake cautions against adjustable rate mortgages as there is a growing concern that since these mortgages are beginning to constitute a larger portion of the mortgages many borrowers may find themselves unable to afford their monthly payments. Especially if rates continue to rise. As a mortgage professional I tend to caution against adjustable rate mortgages, in particular the more exotic variety such as the pay option ARM. These mortgages have their place and a function but if it is being used on your primary residence simply because the lower monthly payments are attractive, then you may be jeopardizing the equity in your house. Or even worse, you may be in danger of defaulting on your mortgage and going through foreclosure which can have serious adverse effect on your credit and your ability to finance real estate in the future.