The Federal Reserve must work to keep 30-year fixed mortgage rates at historically low levels for the next year or the economy will remain in recession, according to a group of chief executive officers from leading U.S. companies.

A policeman walks around the Federal Reserve 

Building in Washington October 29, 2008. 
REUTERS/Larry Downing

The recently formed Housing Working Group of Business Roundtable, made up of CEOs from U.S. corporations with more than $5 trillion of annual revenues, also urged the government to make a comprehensive review of existing foreclosure mitigation and loan modification programs.

If the housing market is not corrected or stabilized, the tide of the recession is not likely to reverse in the near term, and the slide in the economy overall will continue, Richard Smith, chief executive of Realogy Corp and Chair of the Business Roundtable's Housing Working Group, said in a statement.

The group also recommends that the government expand a first-time homebuyer tax credit incentive, and continue to strengthen efforts already underway to review and rework mortgage lending practices.

Recent reports indicate that without significant and immediate reform the U.S. housing market will continue its decline, further dragging down the economy, the group said.

The Mortgage Bankers Association said on Wednesday that a spike in U.S. mortgage rates drove down total home loan applications last week. The average 30-year fixed mortgage rate rose in the June 5 week to 5.57 percent, up nearly a full point from the record low rate of 4.61 percent in March, the trade group said.