New programs and “housing policy interventions” are needed to help the real estate market rebound and boost growth in the overall economy, three Federal Reserve policymakers said Friday.
The latest statements join a range of calls by the Federal Reserve in the last week urging for more government intervention to help the housing market. Last week, the Fed released a 26-page white paper providing an outline on how the government needs to take more aggressive action to prevent home values from falling further, seek solutions to the foreclosure crisis, and loosen stringent underwriting standards that are keeping borrowers from securing mortgages or refinancing.
New York Fed President William Dudley said on Friday that the housing market is "only one factor behind the frustratingly slow" economic recovery, but it's an "important one that deserves our attention."
Dudley said that it’s important for monetary policy to complement actions taken by lawmakers in order to help stabilize home prices and bring about a recovery to the housing sector within the next year or two. He said programs are needed that are aimed at preventing additional foreclosures, easing burdens for home owners in refinancing mortgages, and getting more renters into REO properties.
"Forceful and effective housing policies have the potential to significantly influence the speed and strength of our recovery," Fed Governor Elizabeth Duke said in separate comments made last week at an event in Virginia.
The Fed will hold its next policy-setting meeting Jan. 24-25.
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