Fed reports US economy and housing market slowing
Fed Reserve Chairman says that the housing market - along with the economy - is deteriorating, and home sales drop in fourth quarter.
The National Association of Realtors announced on Thursday that fourth quarter information about the housing market in the US was not good. It shows that sales of existing homes here fell in 45 states, and only South Dakota saw an increase in sales. There, home sales rose 8.9 per cent over the previous year.
The median home price was also announced. It showed a drop in about half of the 150 largest metropolitan cities in the country. 16 of those areas say double digit percentage drops in price. Those with the largest fall including Lansing, Michigan, Sacramento, California, Jackson, Mississippi and Riverside, California. Each saw declines ranging from 17 to 19 per cent in house values.
Additionally, the US economy saw bad news as reported by AOL Money and Finance. Ben Bernanke, Chairman of the Federal Reserve, said, "The outlook for the economy has worsened in recent months, and the downside risks to growth have increased." He then continued, "To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so."
Problems in the US mortgage industry stem from the lack of ability for lower qualified individuals to obtain new loans and the inability of lenders to offer loans larger than US $417,000.