per capita basis. for example, we initiate more than 30 billion electronic payments over credit and debit card systems and the ach. and these retail electronic payments have grown by about 10 % per year over the past decade. as a result of these factors, the proportion of checks written compared with the total number of non - cash payments has actually declined from about 80 % in 1990 to around 70 % in 1999. the share of electronic payments increased by a corresponding amount. this is a significant change for an economy as large and diverse as that of the united states. on a per capita basis, credit cards are still the most intensively used form of electronic payments for retail transactions, although the use of debit cards has recently been growing at double - digit rates. furthermore, more than half of workers now receive a direct deposit of their paychecks through the ach. as i noted at the outset, the pace of innovation in the retail payments system has once again picked up. there seems to be a continual stream of announcements about new products and projects, as well as new players and shifting alliances. some of the products are ingenious new ways to make payments over the internet. others aim to automate older payments mechanisms, such as projects to convert checks to electronic payments at the point of sale. the competition among all the different actors has intensified, as they jockey for competitive position in the marketplace. therefore, i put these facts together to conclude that today ’ s trends might give a hint of the contours of tomorrow ’ s world. checks, cash, credit cards and the ach, the established retail payment tools, will all have a place. however, some of the newer electronic payments mechanisms, including internetbased person - to - person and “ c2b ” payments mechanisms, will grow from infancy to greater maturity as well. each of these payments mechanisms will find a niche, and some will break from the pack into general use. challenges for the private sector the major lesson for the private sector is a challenging one, particularly given its limited resources and its imperative to create shareholder value. i believe that the firms that will succeed in the world of retail payments will have to be prepared to invest simultaneously in modernizing the current retail payment systems - giving them a more electronic and automated backbone - while also experimenting with some of the newer payment tools. it appears that many institutions that thought that the check was going to die off now recognize that they must make strides in improving the security and

home sales released last week suggests that sales will fall further. reflecting the slowdown in sales, builders have responded by pulling back on starting new single - family homes. so far, the contraction in housing demand has been more pronounced than the changes in supply, and so inventories of homes for sale have increased. while inventories of existing homes are still low in historical terms, they have grown a lot for new homes. based on the current pace of sales, estimates of the number of months of supply of new homes has shot up and is now nearing the peaks seen in 2008 during the previous housing cycle. the easing in housing demand can also be seen in a slowdown in house price increases. nationwide, prices of existing homes rose by about 20 percent over the 12 months ending in may, while they rose at an annual rate of less than 10 percent in recent months. prices have even fallen in some areas of the country, especially those that saw the largest increases over the previous two years. and many builders are reportedly cutting their list prices and offering larger incentives. the combination of price cuts and slowing of new single - family construction should help builders work off excess inventory, continuing to bring the market into better balance. in addition, after mortgage rates stabilize, their drag on housing demand should ebb. while this market correction could be fairly mild, i cannot dismiss the possibility of a much larger drop in demand and house prices before the market normalizes. despite the risk of a material correction in house prices, several factors help reduce my concern that such a correction would trigger a wave of mortgage defaults and potentially destabilize the financial system. one is that because of relatively tight mortgage underwriting in the 2010s, the credit scores of mortgage borrowers today are generally higher than they were prior to that last housing correction. also, the experience of the last correction taught us that most borrowers only default when they experience a negative shock to their incomes in addition to being underwater on their mortgage. because people still need a place to live, demand for rental housing has remained quite strong. rental vacancy rates are very low. reflecting this fact, multifamily construction has been quite high this year, at a level not seen since the mid - 1980s, when the tax treatment of investment in structures was much more favorable than it is today. but demand is still much greater than supply, so rents have continued to surge. 3 / 6 bis - central bankers'speeches so what does all of this mean for inflation