In testimony to the House of Representatives' Committee on the Budget, Federal Reserve Chairman Ben Bernanke noted that several economic factors are keeping the overall market down, but specifically noted instability in the job market is encumbering the housing sector.
"Uncertain job prospects, along with tight mortgage credit conditions, continue to hold back the demand for housing," said Bernanke. "Although low interest rates on conventional mortgages and the drop in home prices in recent years have greatly improved the affordability of housing, both residential sales and construction remain depressed."
He added that a considerable supply of vacant properties - many of them foreclosed houses - remains a burden on the weak real estate sector, as they are maintaining downward pressure on home prices.
While Bernanke said homeowners and homebuyers are facing a number of issues, a release by Fitch Ratings states mortgage servicers are expected to face worsening problems this year.
According to the ratings firm, foreclosure processing expenses are projected to increase in 2012 for servicers, due to new mandates of compliance implemented by the Consumer Financial Protection Bureau.