ATLANTA Nov 15 The improving U.S. housing
market is "far from being out of the woods," Federal Reserve
Chairman Ben Bernanke said on Thursday, arguing that part of the
problem are lending standards that are overly tight.
The Fed, which has focused on mortgage bonds in its latest
round of asset purchases, will continue to do what it can to
support the housing market, Bernanke said in prepared remarks.
A bubble in the housing market was at the core of the
2007-2009 financial crisis and the housing market continues to
hamper the world economy. Data in recent months, however, show
the sector is on the mend.
"Although there are good reasons to be encouraged by the
recent direction of the housing market, we should not be
satisfied with the progress we have seen so far," Bernanke told
the Operation HOPE Global Financial Dignity Summit.
The Fed chairman noted that tighter credit standards were an
appropriate response to the peak in house prices and the crisis
"However, it seems likely at this point that the pendulum
has swung too far the other way, and that overly tight lending
standards may now be preventing creditworthy borrowers from
buying homes, thereby slowing the revival in housing and
impeding the economic recovery," Bernanke said.
(Reporting by Karen Jacobs; Writing by Jonathan Spicer; Editing
by Neil Stempleman)