Bernanke Sees Signs of a Bottom in Real Estate

Speaking before the Joint Economic Committee at Congress on Tuesday, Federal Reserve Chairman Ben Bernanke said the U.S. economy could return to growth later this year, provided that improvements in the financial markets continue.

“In coming months, households' spending power will be boosted by the fiscal stimulus program, and we have seen some improvement in consumer sentiment,” Bernanke noted.

[Photo courtesy of Ideal4Investors | flickr]

Looking at the real estate market, Bernanke said housing “has also shown some signs of bottoming” after three years of decline.

“Although some of the boost to sales in the market for existing homes is likely coming from foreclosure-related transactions, the increased affordability of homes appears to be contributing more broadly to the steadying in the demand for housing,” he said.

Bernanke noted the average rate for a 30-year fixed-rate mortgages has fallen nearly 1.75 percentage points since August, and falling inventories is setting up for a recovery in housing starts.