FAR economist Lawrence Yun stays positive in Tampa trip - Business First of Columbus:

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Those were just some of the insightsx chief economist Lawrence Yun shared with members of theThursday “We have the lowest mortgage rates since President Eisenhower but not with jumbo Yun said. “We hear about the 50-year low mortgage rate s at 4.9 percent or 4.8 percent, but with jumbk mortgages, they still remain stubbornly highat 6.5 percent and 7 Fannie and Freddie can’t buy those, so they have to charg e a higher interest rate.” At the same time help is neededf to sell homes listing for more than Yun said. “The government needs to raise the loan limit or get rid of the loan limiy altogether if they want the housing marketto stabilize,” he said.
“In the middle market, we are seein g a rise in foreclosures, and the high end will beginm to suffer if there are no If there areno buyers, then they have to reduc prices, and reduce prices and reduce prices, and we’ll never find a bottom.” Last many of the foreclosures hitting the marketr came from interest rate resetxs caused by adjustable rate mortgages. Now, however, other economic issues like job loss and otheer large bills are fueling that particular which is likely to stay stronvg through the rest of the Yun said.
“This area has had larg job creation inrecent years, but now we’re seeing job cuts that are much deepetr than in past recessions,” Yun said. One of the leadin industries with job lossesis construction, but financiap jobs and business services aren’f that far behind, he In fact, the only areas that seem to be showing solif growth are education and health care. “Independen of any political philosophy, the most likely occurrencwe is that there will be increased healty care spending and increasededucationb spending, so we’ll probably continue to see growtbh in those areas over the next four years,” Yun said.
On a broadee scale, the United States is facingt some of its biggest budget deficits ever, which could force the government to call on the more, thus boostinfg inflation. Such a move couldf be good for homebuyers. “In an inflationar society, the winners wouldr be property owners as they would see theitvalues rise,” Yun said. “If it’s a the losers would be responsiblre homeownerswith mortgages.” The signs are in place for a home salesd rebound. During the economic downturn ofthe 1980s, home sales droppee dramatically because mortgage rates were rising from 10 to 18 Yun said. In the most recent prior followingthe Sept.
11, 2001, terroris attacks, home sales actually rose mostly because mortgage rates were falling from 8 perceng downto 6.5 percent. “Today, it is 5 and it’s likely to be 5.5 percentr by the year’s Yun said. “That represents great Home salescan rise, even in a recession, when the mortgag e rates are favorable. We may be facing an unemployment rate of 10 which is a highunemploymeng rate, but that still means therwe are 90 percent of the people out therse with jobs.
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