Federal Reserve Bank of Philadelphia president Charles Plosser said Tuesday that he expects to see "stabilization and maybe slight improvement" for housing in 2012.

In a speech in San Diego, Plosser cautioned, however, that "at a national level, though, we must acknowledge that we entered the recession over-invested in residential real estate, and we are not likely to see a strong housing recovery until the surplus inventory of foreclosed and distressed properties declines."

He said housing and related sectors "are not likely to return to those heady prerecession highs, nor should we expect them to do so. Those highs were unsustainable, and the housing crash that ensued destroyed a great deal of wealth for consumers and the economy as a whole."

— Alan J. Heavens