By Glenn Somerville
WASHINGTON (Reuters) – A slump in U.S. homebuilding that slowed growth at the end of 2007 will help wring out excesses and the Bush administration is not trying to ward it off, U.S. Treasury Secretary Henry Paulson said on Wednesday.
“After years of unsustainable home price appreciation, this is a necessary correction,” Paulson said in prepared remarks for delivery to a real estate roundtable. A proposed fiscal stimulus package “is not intended or expected to slow down the housing correction,” he added.
Paulson said the housing downturn’s impact was evident in the sharp deceleration in national economic growth to a 0.6 percent annual rate in the fourth quarter, which the Commerce Department reported earlier on Wednesday.