The U.S. real estate market has been exceedingly healthy. There is, however, one person who believes that the run-up in real estate prices could be problematic. Such price increases could possibly amplify an economic downturn, according to Eric Rosengren, president of the Federal Reserve Bank of Boston, and a financial regular at the U.S. Central Bank.

At a recent banking supervision conference in Bali, Indonesia, Rosengren indicated that the increase in prices, especially in the apartment sector, could lead to financial instabilities that interest rates might not be able to contain. He also noted that real estate has, in the past, played a large role in financial instability episodes, and prices, at present, are outpacing growth in building owners’ and investors’ operating income.

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