WASHINGTON — Federal Reserve Chairman Alan Green-span has a warning for home buyers trying to save money by taking out interest-only or other exotic mortgages: "Adverse events" in the housing market could leave you vulnerable.

Translation: If home prices fall or interest rates increase, you could be stuck.

In a generally upbeat report on the state of the economy, Greenspan cautioned that the housing boom and soaring energy prices could threaten the favorable outlook. He made clear, in testimony yesterday to the House Financial Services Committee, that the Fed would continue to push interest rates higher this year to keep the economy and inflation on an even keel.

Greenspan said exceptionally low long-term interest rates — especially for home mortgages — have helped propel the housing boom and the steep climb in home prices.

Greenspan offered some of his strongest comments on the dangers that could be faced by homeowners living where home prices have soared.

In some markets, home prices "seem to have risen to unsustainable levels," he said. A drop in house prices would probably produce "some economic stress," he said.

Greenspan also issued a fresh warning about the increased use of nontraditional mortgages, such as interest-only mortgages, which could leave home buyers "vulnerable to adverse events" if house prices begin to fall. "For individual cases, they could be disastrous," he said.

For now, though, economic barometers suggest the economy has emerged from a springtime soft spot, Greenspan said.

"Our baseline outlook for the U.S. economy is one of sustained economic growth and contained inflation pressures," he said. Economists viewed Greenspan's comments as cementing another quarter-point increase at the Fed's next meeting, Aug. 9.