Federal Reserve Bank of Dallas President Richard Fisher said he believes low mortgage rates have helped bring an end to the slump in U.S. housing.
“I do think the housing market has bottomed out,” Fisher said to reporters today in Aspen, Colorado. The improvement has been “assisted by these low mortgage rates that we’ve had.”
More Americans than forecast signed contracts to purchase previously owned homes in May, indicating the real estate industry is firming three years after the start of the economic recovery. The index of pending home resales climbed 5.9 percent to 101.1, matching a two-year high reached in March, after a 5.5 percent decline in April, according to figures from the National Association released yesterday.
Record-low mortgage rates and cheaper properties may keep sparking buyer interest, even as cooling employment and limited access to credit remain hurdles for the market. The Fed’s decision last week to extend a program aimed at holding down borrowing costs may sustain the progress in residential real estate.