Former Federal Reserve chairman, Alan Greenspan, thinks that the current economic downturn is temporary, according to a report in the Toronto Star. The housing market in particular may not have bottomed out yet but he does not think it will get much worse.

“I think that while we are past most of it there are a lot of negatives … but it is no longer subtracting from the (gross domestic product) growth,” the former Fed chairman said.

For the broader economy, Greenspan offered tempered optimism, citing strong profit margins and capital goods data that are “showing some potency.”

“It’s hard to envisage those two key factors coming at the beginning of a recession,” he said.

He warned that some home buyers might have interest costs increase in the short term, however.