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Don't Get Too Excited About a Housing Recovery: NY Fed's Dudley

NEW YORK ( TheStreet) --Various housing market indicators might be looking up, but it may be too early to get excited about the housing recovery,

Speaking at a distressed real estate conference on Friday, New York Federal Reserve President William Dudley, who also serves as vice chair at the interest rate setting arm of the Federal Reserve, said that housing market had failed to respond to monetary policy.

He pointed to several housing market indicators that remain weak despite the recent rebound.

"It is true that various housing market indicators have looked somewhat better of late. Housing starts and sales of new and existing single-family homes are trending up gradually. Nationally, home prices have stabilized and begun to rise modestly after falling roughly 30 percent from their 2006 peak," said Dudley in prepared remarks. "However, the absolute level of starts and sales remain quite low, particularly when viewed on a per-capita basis. Moreover, housing market conditions still vary significantly across the country, with the worst performing counties still experiencing high volumes of distressed sales and annual house price declines of around 5 percent."

That limits the ability of housing to contribute more positively to economic growth, he noted.

He attributed the sluggishness in the housing market to familiar problems of constrained credit, the inability of underwater borrowers to refinance and the continuing onslaught of seriously delinquent loans that are adding to the foreclosure pipeline.

Separately, the New York Fed released new data about the distressed residential real estate market.Through a series of interactive maps, viewers can explore the current status of foreclosed inventory and future scenarios at national and state specific levels.

Among the findings, California, Michigan and Florida account for 30% of the total real estate owned (REO) property in the market.

Also, if the average number of days properties remain seriously delinquent and in foreclosure increases, foreclosure inventories could triple in New York and double in New Jersey. You can explore more about your state here.

--Written by Shanthi Bharatwaj in New York

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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