HousingWire reports the Federal Reserve says the ongoing tepid housing market continues to suppress economic recovery. Minutes from the Nov. 1-2 meeting of the Federal Open Market Committee (FOMC) suggest more “policy accommodation” may be needed to spur the economy.Tight credit, lack of new household formation, and depressed job and income outlook are hindering home sales despite historically low interest rates. Foreclosures continue todepress home prices as well as the construction of new homes. Disputes over servicing documents, and lenders deciding to not put foreclosed homes on the market will continue to stifle recovery of the housing market, according to the minutes. Thomas Hoenig, outgoing president of Kansas City’s Federal Reserve Bank and continuing lone dissenter against policy adjustment, says more policy accommodation “would risk a further misallocation of resources and future financial imbalances that could destabilize the economy.” Hoenig has been nominated to become vice-chairman of the Federal Deposit Insurance Corporation (FDIC).
(Graphic credit: Federal Reserve System)