Real Estate News Published April 11, 2012 By Steve Melman
Bernanke’s Keynote Speech at NAHB International Builders’ Show

The home-building industry is on the rebound after years of recuperating from the housing bust. As the U.S. government has swung into action, many are looking to the Federal Reserve to provide answers and solutions to help speed the recovery of the U.S. housing market.

On February 10th, Fed Chairman Ben Bernanke spoke at the National Association of Home Builders’ International Builders Show. The keynote speech would address issues affecting housing recovery and aid options the Federal Reserve has planned.

Presently, 30-year fixed mortgage rates are experiencing their lowest levels since the Federal Reserve came into existence. In turn, those rates are allowing more individuals than ever to begin financing the purchase of a home. Bernanke also recently assured homebuyers and homeowners that short-term interest rates would remain at their present levels through 2014.

But a frustrated public is asking for more to be done. 2011 was the lowest level ever for new home sales with only 302,000 housing units sold. The Fed has also estimated foreclosed homes will grow nationally by a million units yearly for the next few years at least. The glut of resulting housing inventory would slow construction of new residential units resulting in lost jobs.

Bernanke mentioned the Fed “REO-to-rental programs” which are being considered to counteract the effect of empty and foreclosed properties on the market. The Fed is backing a foreclosure-to-rental program as part of a 26-page document to Congress. “Keeping paying tenants in homes — including leasing to the former owners at market rents — may, in some cases, be the best way to maintain property values and the quality of neighborhoods.” Bernanke added: “REO-to-rental programs could potentially also minimize the amount of time a vacant property languishes in REO inventory.”

Despite being unable to offer a “silver bullet” solution, Bernanke was well received and moments of the keynote were punctuated with applause. Overall, it was obvious the government has been listening to the needs of the public and working to help the recovery.

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Steve Melman

Steve Melman is a business executive that writes research-infused articles on a variety of topics, including real estate trends, property investing, and breaking news.


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