Employment concerns, tight underwriting and the over-supply of homes on the market are still outweighing what have been great gains in affordability, Federal Reserve chairman Ben Bernanke said Thursday.
“Uncertain job prospects, along with tight mortgage credit conditions, continue to hold back the demand for housing,” he said in testimony on the economic outlook and the federal budget before a House committee.
“Although low interest rates on conventional mortgages and the drop in home prices in recent years have greatly improved the affordability of housing, both residential sales and construction remain depressed,” said Bernanke. “A persistent excess supply of vacant homes, largely stemming from foreclosures, is keeping downward pressure on prices and limiting the demand for new construction.”
