A Federal Reserve official is speaking this morning. "One of the greatest risks to the U.S. economy is a possible sharp slowdown in the housing market, said Boston Federal Reserve President Cathy Minehan. Speaking to the New England Realtors Conference on Monday, Minehan said, 'The resulting rising stock of unsold new homes will likely bring about a modest decline in construction, probably accompanied by a gradual flattening of house prices,' Minehan said."

"'As construction of new homes slows and the pace of growth in housing wealth eases, economic activity will be restrained. The question is 'How much?'"

"The Fed's forecast assumes a flattening of home prices and a decline in construction, leading to a slight softening in economic growth. The Fed sees economic growth of 3.5% this year. 'Clearly, however, we could be wrong on the magnitudes,' she said'. 'Real estate prices could actually decline.'"

"While a slowdown in household wealth creation could damp consumer spending, some consumers could be hurt more than others, especially highly leveraged borrowers who've taken out interest-only loans. 'There is no doubt that some potential exists for consumer hardship,' she said. 'I am concerned about the impact on some consumers of mortgages that become too costly, and the possible implications for lenders and markets,' she said. 'However, at this point, I do not view this as likely to be a major issue,' in New England at least."

The USA Today had this related report. "With the allure of easy money, thousands of Americans flocked to jobs in the real estate industry during the boom years. 'You saw it, there were dollar signs in their eyes,' recalls Nick Vayonis, a former real estate agent in Los Angeles."

"He left the business a year ago, just in time, he says. 'I could see the ebb and flow. It wasn't going to be like that forever,' says Vayonis, 40, who just opened a coffee shop in Canton, Ga., near Atlanta with his wife, also a former agent."

"As the housing market slows, there will likely be a lot of stories of people who are bailing out of their real estate jobs and other professions related to housing, appraisers, mortgage brokers and home construction workers, and many not by choice. Almost four out of every 10 jobs created in the past four years were in housing-related fields. At the end of last year, a record 9.8% of U.S. workers were employed in the real estate industry."

"Many companies are already seeing some business evaporate. Last month, Washington Mutual said it would close 10 mortgage processing centers and fire 2,500 employees. In November, mortgage company Ameriquest handed out 1,500 pink slips. The housing industry is braced for more belt-tightening. 'At best, people should prepare for no pay increase and no bonus, something they have been getting a lot of. At worst, they should be thinking they may need to change occupations,' says (economist) Mark Zandi."

"While it's painful for those involved, Zandi calls the slowing in housing 'a necessary adjustment.' The economy had gotten so dependent on housing that it needed to come down a bit to make the economy more evenly balanced. 'Housing has been flying high, and it's now coming back down to earth,' he says."

"Your income 'is very unpredictable,' says Janice Hofferber, who left her job as a Wall Street stock analyst in 2003 and tried her hand as an agent in Bay Head, N.J. She quit last September. It was no easier in the mortgage loan business, says Toney Goucher, who closed his restaurant in Arkansas and became a mortgage broker in 2002. Last summer, the market started drying up. 'It seemed like every month, we had another interest rate hike, and it got harder and harder to find clients,' recalls Goucher.'

"Goucher threw in the towel and put on an apron. He opened a Fat Toney's barbecue restaurant in January. Goucher says he has already gotten a couple of calls from mortgage brokers he knew in Kansas asking about possible franchise opportunities for his barbecue restaurant. 'They say, 'You're lucky you got out.'"