Shortly after the Federal Reserve releases a report on what needs to be done to restore the housing market, the National Association of Home Builders and National Association of Realtors, echoed the Fed's sentiment, stating that restoring the nation's housing market is a key factor to stabilizing the nation's economy.
According to a Fed white paper, titled "The U.S. Housing Market: Current Conditions and Policy Considerations," there needs to be more credit lending to qualified prospective homebuyers and loan modifications granted to current homeowners who are struggling to make payments.
After the report's release, member from both the NAHB and NAR stated their pleasure with the Fed's assertions.
"The Federal Reserve’s report to Congress confirms what we have been saying for some time: That extraordinarily tight credit conditions are preventing creditworthy borrowers from obtaining home loans and this is harming the housing market and the broader economy," said NAHB chairman Bob Nielsen.
Additionally, Nielson added that the lack of available credit also extends to loans for housing construction. Due to the shortage, the construction of new homes is being prevented in local areas that need them most, noting that some regions that have booming job markets has resulted in a lack of available housing. By allowing new constructions, it's believed that even more jobs could be brought to these areas.
Meanwhile, NAR has also made similar claims, declaring the importance of mortgage refinancing and short sales to further assist the housing market and subsequently, the economy.
"Expanding financing opportunities to qualified buyers could help reduce distressed property inventories, minimize the negative impact those homes have on local markets and restore vibrant housing markets and neighborhoods," said NAR president Moe Veissi.
With a high foreclosure rate plaguing the housing market, NAR has urged lenders to create programs that aggressively address the issue and keep homeowners in their properties.
However, for homeowners who are unable to avoid foreclosure regardless of a mortgage modification, NAR says that offering more options to obtain a short sale could assist households financially. According to the industry group, the current short sale process is inefficient and time-consuming and as a result, many prospective buyers end up abandoning the transaction in hopes of finding better deals.