Besides being a “central” player in causing the current economic crisis, the housing sector continues “to inhibit a broader recovery,” and the softness is “likely to persist for some time,” according to Federal Reserve Board governor Elizabeth A. Duke.

“In particular, we have entered a cycle where high levels of default on mortgage debt have led to a reduction in the availability of mortgage debt as well as a tightening of terms for it,” she told the Global Association of Risk Professionals, according to a text of her speech released by the Fed. “This situation has led to lower levels of home sales and prices paid for homes, which, in turn, contributes to yet more defaults by borrowers.”

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