Robert Toll, Chairman and CEO of Toll Brothers

This is a partial transcript from Your World with Neil Cavuto, March 4, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Did Alan Greenspan just dis housing on Tuesday? The Fed chairman talking about the sector in a speech in Orlando that our economy that's been very hot for a very long time, well, those days might be numbered, at least for housing, saying that it could slow down, could reverse. Is my next guest worried? With us now from the Philadelphia area, the head of homebuilding giant Toll Brothers, Robert Toll.

Bob, good to have you, thanks for coming.


CAVUTO: What do you make of what the big guy was saying?

TOLL: Well, one of your producers asked me before we went on the show whether he was single-handedly trying to take out the last pillar of the economy, the housing industry. And my answer is, I wish he only were single-handedly trying to do this. As Harry Truman said, he wished he could find a one-handed economist. What he said was, on the one hand, housing could slow down as interest rates go up. On the other hand, interest rates are only going to go up if you have got a pretty good economy and business is recovering. Personally, we would rather take an 8 percent mortgage rate and no threat of war, and a recovering economy, I think we'll sell more houses.

CAVUTO: Yeah. But I read into his remarks, Bob, that he wants to pierce this bubble because I think he didn't say it in so many words, I think he thinks it is a bubble. You obviously do not. Most people who look at housing stocks and the fact that they still trade at obscenely low multiples do not buy that. But I wonder whether that's his intention.

TOLL: I don't think so. He said specifically that he didn't think there was a housing bubble. He referred to the rate of inflation in home prices over the past five years as being 6 to 7 percent. And when you take a look at the housing starts over the past 10 years, they are basically flat. And when you take a look at the population growth, you have got approximately 35 million more people that came into the United States in the last 10 years. They are trying to squeeze into...

CAVUTO: Oh, I know, a limited supply. But very quickly, Bob, our time is almost up, do you think that he was targeting your industry even in a polite way today? And if so, are you worried going forward?

TOLL: No, I don't think so. And we're not worried going forward. As long as the supply stays constrained and we can get an increased supply for the major home building companies, I think our industry is in pretty good shape.

CAVUTO: All right. Robert, we'll see what happens. Good seeing you again, thank you.

TOLL: Thanks, Neil.

CAVUTO: Robert Toll, the big cheese of Toll Brothers.

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