Federal Reserve chairman Ben Bernanke expects hiring and economic growth to "pick up" in the second half of this year, but the nation’s central banker did not provide any encouraging words for the housing industry.
Despite low mortgage rates, many potential homeowners are "unable" to qualify for a loan due to tight underwriting standards, the Fed chairman told an American Bankers Association monetary policy conference in Atlanta.
"Uncertainties about job prospects and the future course of house prices have also deterred potential buyers," Bernanke said late Tuesday afternoon.
The Fed chief reaffirmed the Fed's policy to maintain a "highly accommodative" monetary policy and to keep the federal funds rate at "exceptionally low levels" for an extended period of time.
"The U.S. economy is recovering from the worst financial crisis and most severe housing bust since the Great Depression," Bernanke said.
Typically, a revival in home sales and construction plays an important role in economic recoveries, but this time around that’s not the case. "The depressed state of housing in the United States is a big reason that the current recovery is less vigorous than we would like," he said.