Fed plan not a housing, mortgage market cure
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fed plan, housing market, mortgage market March 12th, 2008NEW YORK (Reuters) - A central bank plan to infuse the financial system with new cash is a temporary fix for the debilitated U.S. mortgage bond and housing markets, but not a cure.
The program announced by the Federal Reserve on Tuesday frees up money for mortgage loans and dealer bond buying in the two markets paralyzed by limited funding and fears of bank failures, economists and analysts say.
“This is a tourniquet, it will staunch the bleeding, but it may not turn us around and bring the patient to health,” said Susan Wachter, real estate and finance professor at The Wharton School, University of Pennsylvania.
Tighter lending standards, dried up funding and record foreclosures are swelling the supply of unsold homes in the worst U.S. housing market since the Great Depression.
Tags: fed plan, housing market, mortgage market
