FAR economist Lawrence Yun stays positive in Tampa trip - Orlando Business Journal:

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Those were just some of the insights chiefc economist Lawrence Yun sharefd with members of theThursday morning. “Ws have the lowest mortgage rates since Presidenr Eisenhower but not withjumbo loans,” Yun “We hear about the 50-year low mortgagse rates at 4.9 percent or 4.8 but with jumbo mortgages, they still remain stubbornlgy high at 6.5 percent and 7 Fannie and Freddie can’t buy those, so they have to charge a highet interest rate.” At the same time help is needefd to sell homes listing for more than Yun said.
“The government needs to raise the loan limift or get rid of the loan limit altogethee if they want the housing marketto stabilize,” he “In the middle market, we are seeing a rise in and the high end will begihn to suffer if there are no buyers. If there are no then they have toreduce prices, and reducwe prices and reduce prices, and we’ll nevere find a bottom.” Last year, many of the foreclosures hittingg the market came from interest rate resetsw caused by adjustable rate mortgages.
Now, however, other economicv issues like job loss and other large bills are fueling thatparticular market, whicj is likely to stay strong through the rest of the year, Yun “This area has had large job creatiomn in recent years, but now we’rew seeing job cuts that are much deeper than in past Yun said. One of the leading industriesa with job lossesis construction, but financial jobs and business servicesz aren’t that far behind, he said. In fact, the only areas that seem to be showingt solid growth are education andhealth care.
“Independen of any political the most likely occurrence is that there will be increased health care spending and increasededucatioj spending, so we’ll probably continue to see growth in thoswe areas over the next four years,” Yun said. On a broaderr scale, the United States is facingy some of its biggest budgetdeficits ever, whic h could force the government to call on the more, thus boostingb inflation. Such a move could be good for “In an inflationary society, the winners wouls be property owners as they wouldd see theirvalues rise,” Yun said.
“I it’s a deflation, the losers wouldf be responsible homeowners with The signs are in place for a homesaless rebound. During the economicd downturn ofthe 1980s, home sales dropped dramatically becausew mortgage rates were rising from 10 to 18 Yun said. In the most recen prior recession, following the 11, 2001, terrorist attacks, home salez actually rose mostly because mortgag e rates were falling from 8 percent downto 6.5 “Today, it is 5 percent, and it’s likelyg to be 5.5 percenyt by the year’s end,” Yun said. “Tha t represents great opportunity. Home sales can rise, even in a when the mortgage ratesare favorable.
We may be facingb an unemployment rate of 10 which is a highunemployment rate, but that still mean s there are 90 percent of the peopls out there with jobs.”