US Housing Market Not Yet Out Of Problems
A bubble in the U.S. housing market triggered the financial crisis from 2007 to 2009

Tougher standards for giving credit were an appropriate response to the maximum price of houses, which followed the crisis


The U.S. housing market has improved, but still "far from out of difficulties", said the Federal Reserve chairman, Ben Bernanke, noting that overly strict lending standards are part of the problem.

The Fed, which has put the focus on mortgage bonds during the last round of asset purchases, continues doing what it can to support the housing market, he added.

A bubble in the U.S. housing market triggered the financial crisis and a brutal recession from 2007 to 2009 that continues to weigh on the world economy. Data from the last few months, however, have shown that the sector is reviving.

"While there are good reasons to be excited about the recent direction of the housing market, we should not be satisfied with the progress we have seen so far", Bernanke said in remarks prepared for an event.

The Fed chairman noted that tougher standards for giving credit were an appropriate response to the maximum price of houses and that followed the crisis.

"However, at this point it is possible that the pendulum has gone too far and now extremely stringent loan conditions are preventing deserving credit borrowers to purchase homes, which therefore slows the recovery of the housing sector and prevents economic recovery", he said.

During the last months of previous year, the Ben suggested that other authorities in Washington were considering steps to free up credit to boost the real estate sector.

But critics on Capitol Hill said the central bank should remain attached to monetary policy.

The property sector usually provides strong signals on the output of a recession in the U.S. economy, but the huge losses of assets have lagged the market this time.
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