Housing Market Likely to Affect US Economy, Says Bernanke
Federal Reserve Chairman Ben Bernanke testified before Congress yesterday about the state of the economy. Bernanke acknowledged that slowed economic growth is ahead, reports BusinessWeek:
Bernanke was joined by Treasury Secretary Henry Paulson and Securities & Exchange Commission Chairman Christopher Cox, and the three were fairly consistent in forecasting slower, but not negative, growth, with a downside bias. Bernanke plainly noted: “In part as the result of the developments in financial markets, the outlook for the economy has worsened in recent months, and the downside risks to growth have increased.”
However, Bernanke insisted that a US recession is not in the future. He said that growth would not go negative, no matter how it slowed. He said that more interest rate cuts may be needed. One of the areas that would slow economic expansion, Bernanke said, was the housing market. He also said that credit markets, especially in the mortgage industry, were tightening standards, offsetting some of the effects of economic stimulus measures.
In this period of slowing economic growth, it is important to focus on your own individual fundamentals, investing with the long-term in mind. It is also worth noting that if you are in a position to buy a home, now is a good time. Home prices are lower, as are mortgage interest rates.
Tags: US economy, US recession, home mortgage loan, Ben Bernanke,
mortgage blog, mortgage interest rates, housing market
