Bernanke: Recovery Requires Stable Home Prices
For a recovery in the housing market to take hold, Fed Chairman Ben Bernanke said home prices need to stabilize, more loan modifications need to take place, and the foreclosure process needs to speed up.
Bernanke said that the high number of foreclosures for sale needs to be cleared from the market so prices can stabilize and “give people confidence that they can buy and not be buying into a falling market,” he said, during his second news conference of the year.
Bernanke also said banks need to help home owners who face foreclosure by modifying their mortgages and lowering their monthly payments. Or if modifications can’t be justified, he says banks need to speed up their foreclosure process.
“The housing sector is very important to the overall recovery, so we pay a lot of attention to that,” Bernanke told reporters at the press conference.
Bernanke said the Fed has lowered its economic forecast, expecting the economy to grow at a slower pace than originally projected and for problems to persist into the next year. High unemployment, he noted, continues to be a significant factor not only weighing down the economy but also stalling the housing recovery.