Tim Geithner, US Treasury Secretary, has revealed the government will continue to guarantee mortgages to minimize the risk of housing-led recessions in future.
The comments were made at a White House summit on the future of government-run mortgage providers Fannie Mae and Freddie Mac, the Telegraph reports.
Geithner said removing Federal support from the mortgage market could lead to “more severe” future recessions “because the financial system would not have the capital to support mortgage lending on an adequate scale”.
Geithner’s comments are expected to boost the US housing market as well as the housebuilding sector.
In July, levels of house building and applications to build new properties fell to their lowest in a year.
Firm plans on how the American government will continue to back mortgages are not expected until January.
