conditions, the federal reserve ’ s community development staff is deeply engaged in helping lower - income and underserved communities overcome their challenges and capitalize on their assets. one thing that was apparent during the recession and the uneven recovery that followed was that people and the places they live are linked. when one struggles, both struggle. successful community development invests in and builds up both the physical infrastructure and human capital in underserved areas. the federal reserve is uniquely positioned to bring together diverse stakeholders to disseminate information, exchange ideas, and identify shared interests that foster local partnerships and comprehensive solutions. this event is an opportunity to recognize your efforts to advance solutions that build resilient and more prosperous communities. i want to thank ariel cisneros - - our distinguished inaugural recipient of the yellen award for excellence in community development - - as well as each of you for your individual and collective service to this effort. and speaking of service : it is fitting that this award for excellence in community development will today and thenceforth be given in honor of janet yellen. during your tenure as chair, janet, you elevated the importance of economic and financial inclusion and the fed ’ s role in community development. you reminded us that an inclusive economy is a vibrant economy. governor brainard, the principal oversight governor for community development, and - 4i are honored to carry this message forward. the economy benefits when we successfully tap into the underutilized potential of more of our fellow americans. 5 thank you, janet, for everything that you accomplished as chair and over a lifetime of public service that thankfully continues today. and congratulations, ariel, for what you have accomplished in service to others, which has made you such a deserving recipient of this award. janet l. yellen, “ so we all can succeed : 125 years of women ’ s participation in the economy ” ( speech delivered at “ 125 years of women at brown, ” a conference sponsored by brown university, providence, rhode island, may 5, 2015 ), www. federalreserve. gov / newsevents / speech / yellen20170505a. htm.

out of growth. by my reading, the incoming data suggest that the housing market has begun to cool somewhat, but they do not point to a sharper falloff. sales of both new and existing homes have declined in recent months, although they remain at a high level ; and after cutting though volatility likely related to swings in weather, housing starts appear to have softened recently. moreover, other indicators of activity, along with anecdotal reports, also seem consistent with an easing, but not with a sharp downward correction. of course, house prices may become an area of vulnerability. house prices have increased at a remarkable rate during the past several years, and for some fundamentally sound reasons, including low mortgage rates. however, the possibility remains that the recent run - up in prices may be greater than can be justified by the fundamentals and that increases in house prices may moderate or undergo a sharper adjustment. the latest data on house prices - - including the figures released this week - - provide a hint that a moderation in house prices, and nothing more serious, may now be under way. the primary channel through which a deceleration or downturn in housing prices would be likely to affect the economy is the so - called wealth effect. that is, the path of house prices directly affects the value of housing wealth, and changes in wealth influence households'consumption and saving. estimates from the federal reserve board staff's large econometric model and from various consumption equations suggest that wealth effects are somewhere in the neighborhood of 3 - 1 / 2 cents on consumption for every dollar of change in wealth, with roughly half the effect realized within a year. however, these estimates are uncertain, and plausible estimates of the wealth effect range from about 2 cents to 6 cents for every dollar of change in wealth. moreover, these estimates are obtained from equations that look at changes in total wealth, whereas historically, much of the variation in wealth has reflected movements in equity prices. although efforts have been made to isolate the effects of changes in different types of wealth, it is difficult to get precise estimates of wealth effects specifically for real estate. and, it is always possible that the effects of housing wealth on consumption might have changed in ways that would be hard to identify using standard econometric modeling techniques. for example, the effects could, perhaps, have increased in the last decade as a wave of financial innovation made it easier and less costly for households to tap accumulated housing equity. a decline in consumer