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NAHB echoes Federal Reserve findings

The lack of demand for housing is causing orders for less strict standards on mortgage lending.

The lack of demand for housing is causing orders for less strict standards on mortgage lending.

A recent finding by the Federal Reserve revealed that extremely strict standards placed on mortgage lending must be eased to increase home ownership.

The National Association of Home Builders has been urging the Federal Reserve to ease mortgage lending standards in order to boost the economy and assist a struggling housing market.

"The Federal Reserve's report to Congress confirms what we have been saying for some time: That extraordinarily tight credit conditions are preventing creditworthy borrowers from obtaining home loans and this is harming the housing market and the broader economy," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada.

Nielsen also said strict stipulations on credit are affecting the housing construction loans as well, which is causing the lack of demand for housing in the country and preventing construction of affordable new homes in markets that need them.

When the economy is at its normal state, the real estate market accounts for 17 percent of the nation's economic output but has struggled recently.

With U.S. apartment vacancies being at an all-time low, rent is beginning to climb, which might discourage Americans from packing up and trying to find a new home.