(NewsCore) – STONE MOUNTAIN, Ga. — US Federal Reserve Chairman Ben Bernanke said late Monday that he expects to see a very high rate of foreclosure starts in 2011.
“We hope to see this decline by next year,” he said in a speech delivered in Georgia.
Bernanke added that foreclosures are negative at a macroeconomic level for the United States.
“The most important transmission mechanism is that, so long as foreclosure are creating an ongoing supply of housing vacancies, we will be seeing continued softness in house prices,” he said.
This in turn affects household wealth, consumer confidence, consumer liquidity and the rate of new construction, he added.
“The high rate of foreclosures is obviously a serious problem and one of the reasons why our recovery is not as strong as we would like it to be,” he said.
Bernanke was speaking at a dinner opening a financial markets conference hosted by the Federal Reserve Bank of Atlanta.
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