Economist Dean Baker, author of the book “False Profits” and co-director of the Center for Economic and Policy Research, said people who are saying the market is on the upswing aren’t paying attention to what is in front of their eyes. Appearing on Yahoo’s Tech Ticker, he noted that house prices were plummeting at the end of 2009, and the federal government put in a series of supports to sustain the market, like the first-time homebuyer tax credit and the large-scale purchase of mortgage-backed securities. But these supports are all about to end, and Baker said he does not see how their absence will drive the market upward. “The idea that the market has stabilized, or that we’re going to see house prices rising any time soon — it’s really hard to see the case for that,” he said. [more]

The housing recession has passed its lowest point, many argue, but Florida and other southern states are in worse shape than many areas of the country. Property values have dropped 38 percent and $4 trillion in equity has been wiped out, but home resales, new home sales and construction are all rising from the bottom. Economist Dean Baker of the Center for Economic and Policy Research says the freefall is over, but there are still regional market variations. The best one can say of Florida is that the rate of decline in sales and property values is starting to slow, says Steve Cumbie, executive director of the Center for Real Estate Development at the University of North Carolina’s Kenan-Flagler Business School. [more]

Federal officials at the Treasury Department are considering a plan
that would allow borrowers who are behind on mortgage payments to avoid
eviction by renting their homes instead. Under the plan proposed by
economist Dean Baker of the Center for Economic Policy Research, a
bankruptcy judge would help determine a fair rent for the property.
Banks would be able to sell the occupied homes, but the lease would
remain in effect even if the ownership changed. Officials are still
figuring out how to replace a loan with a rental lease without
disrupting the overall mortgage market. Two possible methods that are
being considered by government officials are paying cash to
mortgage-service companies to take part in the new program or selling
homes to a third party that would write rental agreements. [more]