A mild slowing in the buoyant US market is not expected to pose any danger to the country's overall economic health, Ben Bernanke, chairman of the Council of Economic Advisers, told Congress' Joint Economic Committee in Washington.
'However, as reflected in many private-sector forecasts, a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year.'
Private analysts expect growth to be around 3.25 per cent.
Bernanke repeated the Bush administration's belief that the double blows of hurricanes Katrina and Rita would reduce economic growth in the short term, but the US economy's longer-term growth path remains solid.
The average house price soared by 13.43 per cent during the 12 months up to June 30, the biggest gain in more than a quarter of a century, according to the Office of Federal Housing Enterprise
Nevada had the biggest increase, 28.13 per cent, followed by Arizona, 27.82pc; Hawaii, 25.92pc; California, 25.16pc, and Florida, 24.45pc.