WASHINGTON (dpa-AFX) - The sluggish housing market is preventing a more robust economic recovery in the U.S., making low interest rates a necessity, the nation's top central banker said Friday in Orlando.
'Recent declines in housing wealth may be reducing consumer spending between $200 billion and $375 billion per year. That reduction corresponds to lower living standards for many Americans,' Bernanke said during a speech to the National Association of Home Builders.
Falling home values may be having a societal impact as well. 'Homeowners who are underwater on their mortgages cannot tap home equity to pay for emergency health expenses or their children's college educations,' he said.
Yesterday, the federal government and attorneys general from forty-nine states Thursday reached a landmark $25 billion settlement with the nation's five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.
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