Despite improvements in the overall economy, America’s lower-income communities continue to face hard times, said Ben Bernanke, chairman of the Federal Reserve. 

As a result, aiding low-income neighborhoods requires a “multipronged approach” focusing on various aspects, including housing and employment.

“While employment and housing show signs of improving for the nation as a whole, conditions in lower-income neighborhoods remain difficult by many measures,” the chairman said.

He added, “Resilient communities require more than decent housing, important as that is; they require an array of amenities that support the social fabric of the community and build the capabilities of community residents. The movement toward a holistic approach to community development has been long in the making, but the housing crisis has motivated further progress.”

Bernanke also stressed the vital role played by local leaders in revitalizing lower income communities, citing research by the Federal Reserve Bank of Boston of towns that have managed to turn positive.

“Substantial coordination and dedication are needed to break through silos to simultaneously improve housing, connect residents to jobs, and help ensure access to adequate nutrition, health care, education, and day care,” he said.

The 2008 collapse of the housing market and resulting deep recession has deepened the dilemma of many lower-income communities.

Thus, solutions will have to be tailored to whether a low-income neighborhood is urban, suburban or rural.

“Community development leaders have no shortage of commitment to their goals, but with the insights you provide, together with the opportunities to learn from the experiences of other communities, they will be better prepared and thus more successful in meeting the very difficult challenges they face,” Bernanke concluded.

On the last Tuesday of each month, the S&P/Case-Shiller Home Prices Indices are released. Based on the most recent release of this information, average U.S. residential home prices have increased approximately 8.1 percent over the past 12 months.

Driven by a combination of persistently low mortgage borrowing rates, moderately improved unemployment rates and a reported scarcity of supply, the increased demand for the average residential home is pushing prices upward. Additionally, family formation rates are recovering from the downturn experienced during the recent recession.

Leading the price recovery over the past 12 months are areas such as Phoenix, San Francisco and Las Vegas. Case-Shiller reports these areas have seen price increases of 23 percent, 18 percent and 15 percent, respectively, over the past 12 months. Some of these locations are also areas that suffered some of the greatest price declines several years ago.

A material portion of the overall demand for existing residential housing units is being driven by institutional buyers. Some estimates indicate as much as 20 percent to 30 percent of residential home purchases over the past couple years have come from various types of institutional buyers.