Foreclosures to Rise Even More Next Year; Unemployment Expected to Climb, Also
Foreclosures will peak by the end of next year and unemployment will climb above 10 percent as the housing market and U.S. economy grapple with the aftermath of the recession, the Mortgage Bankers Association's chief economist said this week.</br></br>Jay Brinkmann's forecast, released Tuesday at the trade association's annual convention and expo in San Diego, envisions a slowly growing economy and improving housing market, with home price declines abating and fixed mortgage interest rates remaining below 6 percent.</br></br>But the strength of any rebound will hinge on whether consumers -- many still concerned about job security -- will ramp up spending, he said.</br></br>"The recession is behind us, but the effects of the recession will linger for some time in the form of higher unemployment and lower levels of business investment and home construction," he said.</br></br>Brinkmann projects that economic activity will slow again in the first half of next year but pick up in the second half. That won't be enough to slow unemployment, which is expected to peak at 10.2 percent by mid-2010 and not fall below 8 percent until late 2012.