Bernanke says homes weigh down recovery

Ben Bernanke says declines in home prices have forced many Americans to cut back on spending and warns that could weigh on the economy for years.

THE NEWS TRIBUNE

Published: 02/11/12 12:05 am

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Ben Bernanke says declines in home prices have forced many Americans to cut back on spending and warns that could weigh on the economy for years.

The Federal Reserve chairman drew the connection between home values and consumer spending, which fuels 70 percent of economic activity, on Friday during a speech to the National Association of Home Builders in Orlando.

Bernanke said the broader economy won’t fully recover until the depressed housing market turns around. People are spending less because they are stuck in “underwater” homes.

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