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

acklinegymejac1362.blogspot.com
Those were just some of the insights chiecf economist Lawrence Yun shared with members of theThursday “We have the lowest mortgage ratez since President Eisenhower but not with jumbo Yun said. “We hear about the 50-yeat low mortgage rates at 4.9 percent or 4.8 but with jumbo mortgages, they still remaij stubbornly highat 6.5 percent and 7 percent. Fannier and Freddie can’t buy those, so they have to charger a higherinterest rate.” At the same time help is neededd to sell homes listing for more than $300,000, Yun “The government needs to raiss the loan limit or get rid of the loan limitr altogether if they want the housinb market to stabilize,” he said.
“In the middle we are seeing a rise in and the high end will beginb to suffer if there are no If there areno buyers, then they have to reducee prices, and reduce prices and reducd prices, and we’ll never find a bottom.” Last year, many of the foreclosuresd hitting the market came from interesrt rate resets caused by adjustable rate mortgages. Now, other economic issues like job loss and other large billds are fueling thatparticular market, whichu is likely to stay stronhg through the rest of the Yun said. “This area has had large job creatio n inrecent years, but now we’r seeing job cuts that are much deeper than in past Yun said.
One of the leading industries with job losses is but financial jobs and businesservices aren’t that far behind, he said. In the only areas that seem to be showing solid growtjh are education andhealth care. “Independent of any politicak philosophy, the most likely occurrence is that there will be increasedx health care spending and increased education spending, so we’ll probably continue to see growthu in those areas over the next four Yun said. On a broader scale, the United States is facing some of its biggest budgegdeficits ever, which could force the governmenrt to call on the thus boosting inflation. Such a move couldc be good for homebuyers.
“In an inflationaryt society, the winners would be property owners as they wouldd see theirvalues rise,” Yun “If it’s a deflation, the losers would be responsibls homeowners with mortgages.” The signs are in place for a home sales rebound. During the economic downturn ofthe 1980s, home salew dropped dramatically because mortgage ratew were rising from 10 to 18 Yun said. In the most recent prior followingthe Sept. 11, 2001, terrorist attacks, home sales actually rose mostly because mortgage rates were fallinv from 8 percent downto 6.5 “Today, it is 5 percent, and it’s likely to be 5.5 percenty by the year’s end,” Yun said.
“Thart represents great opportunity. Home sales can rise, even in a recession, when the mortgagew rates are favorable. We may be facin an unemployment rate of10 percent, which is a high unemployment rate, but that still means therr are 90 percent of the peopler out there with jobs.”