from users on youtube and internet users can ask questions on twitter and facebook during the event. it is live just after 1:00 p.m. eastern. . >> blocky president obama's first appointment to the federal election commission by placing a

hold on john sullivan. the senators say they will release the cold only if the president steps two additional nominees to fill expired seats. senate aides say the porter rican legal advocacy group latino justice on who's board to the supreme court nominee served, has spent hundreds in the judiciary committee. the committee's aides say the documents detail the organization's opposition to former high court nominee and its ties to the community organizing group acorn. nomination hearings begin july 13. you can hear them on c-span radio. host: a look at housing and the economy. on the screen kiss lawrence yun, national association of realtors chief economist during his what

is the latest? guest: more buyers are coming into the market. we have seen three straight months of rightistrise in pendie sales. the closings have also been rising. there is some buying activity. mostly it is on the lower price points. people are looking for bargains. at least on the sales activity, it looks like we may be hitting bottom or near bottom. >host: declines in home prices are beginning to slow. can you explain that? >>guest: a combination of lower prices. those with jobs -- we are in a challenging environment in terms of the economy.

the low interest-rate environment is also helping. the stimulus package also includes a first-time home buyer tax credit. some people are trying to take advantage of the tax credit before it expires at the end of november. there is by your activity, but this is due to the declining home values. in the latest data from case- shiller lawyer, it is beginningo stabilize. host: what parts of the country are seeing the most activity? guest: the boom and bust was in four states. california, nevada, arizona, and florida. these markets had the excessive boom and a big bust. home prices have come down 30%, 40%, and sometimes 50%. these are the areas that are now beginning to see strong buyer activity.

the middle part of the country, where there is sluggish activity. there are some signals that the declines are beginning to lessen. host: what does this mean to the broader u.s. economy? guest: the housing market is critical in getting the economy back on track. when you look at past recessions, it was always the housing market recovery that led to economic recovery. it is critical that the housing market does turn around in order to have a sustainable economic recovery. i do recognize that we have a massive stimulus package into the economy, but that can only be a short-term lift, if the recovery happens without the housing market. getting the housing market to stabilize is critical. host: the phone numbers are on the bottom of our screen for lawrence yun, national association of realtors chief economist.

the phone lines for republicans, democrats, an independents. by the way, the tax credit is a credit, not a tax break? guest: that is right. the first-time home buyer would get an eight thousand dollar tax benefit from the government. essentially, a check sent to the home buyer. this is a tremendous opportunity. it is part of the stimulus package in order to encourage buyers to come back into the market. home values have been falling, but some buyers are hesitant, even though the qualified to enter the market. they are thinking that the home values will decline further. to counter that pessimism, here is some money on the table. many people are trying to take advantage of that. host: how is lending going? guest: it is much tighter than

before, and rightly so. we do not want a repeat of a loose lending standards, where we have people who are marginally qualified, or people who are overstretching. lending criteria is much tighter. right now, people who are meeting the tighter underwriting standards are buying homes. overall, people are looking to stay within budget. this is good quality. after we had the excess of years of people trying to stretch their budgets, and now we're seeing that people want to stay comfortably within their finances. the recent buyers who are entering these markets, these are the people who will stabilize the markets. it is a great thing. host: the first call for lawrence yun on the democrats' line. caller: what is the threshold for this $8,000?

i understand that this is supposed to be for first-time home buyers. what about the person's credit? is it just going to be eight thousand dollars? if this person is making $100,000 per year, and this person is making $20,000 per year? host: is it for everybody? guest: there is certain criteria. it is for a first-time home buyer. the definition is someone who has not owned a home for the past three years. if somebody own a home 10 years ago and decided to sell it and has been renting for the past few years could qualify. there's also an income limitation. currently, $75,000 for a single household person. if the income rises above that, it will be phased out.

there is an income limitation. it is up to $8,000, or 10% of home price. host: independent line, you are on with lawrence yun. caller: i paid $66,000 for my home, but i have to pay the bank over $150,000. i think that needs to be addressed. i cannot move forward because i am taking 30 years out of my life to pay back the $60,000. i do not know why you cannot pay more on principal, instead of paying so much to the bank of front. i make $50,000 per year. i do not have any money. i think we can stimulate the

economy if they address why we have to pay back the banks. host: what kind of interest rate? caller: 6.5% >> . guest: this is a very favorable rate. currently, the mortgage rate is roughly at 5.5%, or 5%, depending on credit scores. i am providing the lending activity, essentially, the people who are providing the capital have the right of a rate of return on their investment. the situation is with the interest rates are very low, but some people are still locked in a higher rate. in some cases, the banks are just dragging their feet.

host: the amortization bothers that color. thaback to your point, people are trying to stay within those lines. guest: these are good, long term, healthy developments. the 30-year fixed-rate mortgages. in any given year, there will be normal inflation, so people will pay higher for the price of food and the price of gasoline, but the mortgage rate will be fixed if people went into a 30-year long term mortgage. more than 90% of recent home buyers are looking for the 30- year fixed-rate mortgages. host: who decides the interest rates? guest: the marketplace. the federal reserve tries to nudge by pursuing monetary

policy, but it is really the bond market, how they feel comfortable about the credit risk. and also, the inflationary risk. if they perceive that because of so much pumping of the money into the system that there could be future inflation, then the lenders want to compensate for the potential loss and purchasing power. so they charge a higher interest rate. the other factor is the budget deficit. we have seen an uptick on the general interest-rate environment because people are concerned with the large budget deficits. host: have the rules for down payments changed much? guest: people are required to come up with a larger down payment. for something called conventional mortgages, there's a government that the fha program, and the down payment requirement is 3.5%. as long as people stayed well within their budget, not

overstretching, most people -- an overwhelming number of people will be fined if they stay in their home for the normal holding period of five years, seven years, or 10 years. host: north carolina, republican caller. caller: i only got the tail end of the conversation this morning. i am a home builder. we battled the storm. we are pretty much a conservative bill there. -- conservative builder. what we are running into oare the banks are stuck with a bunch of houses from other builders and bad decisions that were made, and that is preventing our ability. we predominantly do custom builds. we have to have one or two out

there at any one time to show what we do. my concern is, long-term, where do you see the landing from banks to contractors, just so we can retain our livelihood? the only thing is, in the environment we're in, we're not certain, even though we are a relatively strong company. i would love to hear your response. guest: spec homes are where a builder builds hoping to find a client. there is some degree of home activity. regarding the spec homes, the

lending activity has been very tight because there is a large oversupply of inventory in the marketplace. many of the foreclosures are now competing with new homes. the lenders are very cautious. the landing may be overly stringent. we have seen some loosening in the lending activity. on wall street, we have seen the libor rate declined. the interest-rate spread between the junk bond and the u.s. treasury has narrowed. the loosening of the credit has not filtered into the home building loan market. for construction loans, it is still very difficult. maybe it's just passage of time. current activity is far below the trend line? -- curran activities far below the trend line. during the boom, we built too much, over two million. right now, we are building only

a half a million. we are 1 million below the norm. this is trying to burn off the excessive inventory out there. if this low level of activity continues, we could encounter housing shortage in a couple of years. host: florida on the democrats' line. caller: are they really tracking who is buying these homes? i have a friend in real-estate. according to her, most of her purchases are investment firms, people who invest in real estate, not individual buyers. guest: it depends upon the geography. in markets like miami, where there are a large number of condos vacant, we have heard that investors are buying in bulk. also, in areas where there are a large number of foreclosures, some investors are trying to take advantage of the deeply

discounted prices. when we take a broad, nationwide survey, we are finding that the investor activity today is roughly 20% of all home buying activity. in a normal year, it is about 25% as investor activity. it is slightly below the norm. we're still tracking the data to see if there is any notable trend in recent months. we have heard of investors coming into the market. right now, i am not too concerned of the overall investors when i look at the national survey. host: you mentioned foreclosures. there is this headline in "the new york daily news" this morning. bring us up-to-date with foreclosures. how bad has it been? when they use the term new foreclosures -- push it forward

a few months. guest: we have had record high foreclosures. in 2009, i anticipate it will top that, maybe 2.5 million, despite all the efforts that have been made to mitigate foreclosures. right now, a combination of job losses, as well as people under water, meaning that their home values are far below the mortgage debt outstanding. given this, nation, is not a good picture on the foreclosures front. the critical question is whether there are buyers willing to come in to pick up those foreclosures. it's a foreclosed home sits on the market, it deteriorates the neighborhood. when foreclosed homes reach the marketplace, there are buyers. in some communities, multiple bidding is a common occurrence. in orange county, calif., and in

many of the florida markets, the prices get pushed up. host: you mentioned the eight thousand dollar tax credit that goes to first-time home buyers. what else has congress done in recent months to help the housing market? what else might they do the rest of the year? guest: 1 other part of the stimulus package was raising bill loan limit. that is, fannie mae and freddie mac -- let me just take this. in the past, fannie mae and freddie mac were involved in many of the political activities. affectively passing on their low borrowing costs to the consumers. as a result, we have seen historically low mortgage rates on those loans that can be purchased by fannie mae and freddie mac. congress raised the loan limits so that more people would have access to the historic low mortgage rates.

that has helped draw more people into the pool of eligible buyers. the other area is on the foreclosure mitigation. there's a strong financial incentive for the lenders to modify those funds. it is sluggish in terms of activity, but still living in the right direction. host: there is this headline, as well freddie mac it is said to name its new ceo. do you know anything about him? guest: i do not. right now, both fannie mae and freddie mac are effectively nationalized, so the ceo decision is effectively cheachif operating officer because they have to report to the government on a decision they make. in the past, there was a heated argument about the role of fannie mae and freddie mac. right now, fannie mae and freddie mac are effectively trying to serve the consumers by

passing on the low borrowing costs. host: massachusetts, an independent caller. caller: of a like to know how the p.m.i. fits in. do the banks recover that money from the fannie mae and freddie mac -- to the banks recover that money from the foreclosure? guest: the banks would recover part of the loss from a foreclosure through the private mortgage insurance. the reason they pay that insurance is to ensure that the mortgage value declines -- that they can recover a portion of the cost. as a result, the private mortgage insurance companies -- they are suffering deep losses because they need to pay off on these declining home values.

there's a formula attached to it. the lenders are getting a partial recovery. host: west virginia on the democrats in liline. caller: do you think that any of the individuals, other than real-estate agencies, have had any effect on the foreclosures and things of this sort? my wife and myself are possibly going to become first-time home buyers. is there any advice? we have been terrified with what is going on with housing around the united states with the prices plummeting, and then people owing more on their homes in the home is worth. what advice would you give us on that subject? guest: on the second question, on whether it is time to enter the market, the prices have

plunged. as with anything, sometimes there are cycles where things go down and things to up. people who are capturing those low market prices, any further decline in values from this time on is much more minimal compared to what has already happened. also, people holding on for five years or seven years, there's very little concern. if anything, with normal inflation, people will see some appreciation. a company called global insight recently said nationwide, they believe home values are roughly 13% undervalued. prices have come down to the level where all the successes have been removed. host: that said, when my things ricse? guest: the exact timing is difficult. it could be overshooting

downward because of some of the economic challenges and consumer pessimism. in my best assessment, the buying activity that we have recently seen gathering momentum, as such, the inventory will draw that felback down by s year or spring time next year. we will see home price stabilization. locally, real estate is local. we are seeing the housing market recovery take place in some local markets. host: with supply dwindling, does that mean more folks will go back to work in the construction area? guest: the construction jobs will recover. there has been a heavy job loss toll in the construction industry.

when the housing market returns to the normal trend line, there will be job creation in the construction industry. host: ed on the phone from michigan. caller: earlier in the program, the speaker made a statement regarding the details until a tax credit for first-time home buyers. if i owe the government two thousand dollars for income tax, it is my understanding that they would forgive the $2,000, but your statement led me to believe i would get a check from the government for $6,000. guest: that's correct? -- that is correct. it is a tax credit, rather than a tax deduction. if you owe the government $2,000, so you apply that to thousand dollars and then you bring in an $8,000 credit, you

would get a $6,000 tax rebate check to your mailbox. host: do you have a sense that congress might be looking to extend this tax credit later this year? guest: we're seeing great buying momentum right now. the home buying process is not a snap decision. usual home buying process takes about three months. people were renting are locked in on rental contracts so they cannot get out of that for some time. it is critical to extend the tax credit time horizon because we have a very short window. just as the buyers are coming back to the market, we need to keep this momentum up to stabilize the housing market. host: any sense of how much this costs the government? guest: about $20 billion in terms of the home buyer tax credit. in the $1 trillion discussion, i

would say $20 billion is a reasonable sum to get the industry back on track. many economists will say that the economy cannot recover in a sustainable way without housing. i would say the $20 billion is money well spent to stimulate the economy and get the people back on payrolls and start paying taxes, rather than people collecting unemployment checks. host: louisiana, republican caller. if you could turn the sound down, that would be much better. caller: ok. host: we are on with lawrence yun, national association of realtors chief economist. are you there? caller: is this a good time to sell land? i have two questions and a comment.

where does this eight thousand dollars, from? is that from my taxation? it is disappointing to hear the woman with the good home, $66,000, and now complaining with a very good interest rate. we had to borrow at 7.5% years ago. but complaining that she will have to pay $120,000, or whatever the amount was. i think she's comfortably in her home. you hear that more and more. people are not wanting to pay back their mortgages. or is too great a mortgage. and how do you feel about that? guest: the land value all depends on the geography. location, location, location.

some home builders have purchased land in massive amounts and then sold during the bust. they're beginning to repurchase. on the tax credit, this is part of the overall fiscal budget. it is the return of taxpayers' money for people who want to buy a home. part of the stimulus package to get the economy back on track. as the economy get back on track, that means the government will see more people working and able to generate more tax revenue as a result. host: what kind of numbers are you looking forward to nationally in the upcoming weeks? >guest: we have new data released this morning at 10:00 p.m. i cannot say because it is market related. it will give us more direction whether it is a monthly

pickup. one can anticipate some volatility month to month. there will be a general upswing. there will be sales activity for the remainder of the year. inventory will begin to trend down. homeplace decline will be less severe. -- home price decline will be less severe. host: danforth, ill. on the democrats' line. caller: it has been reported in president obama's pending energy bill that has just passed the house that there will be requirements on the housing market for energy worefficiency requirements. have you heard that? what kind of impact do you see that on older homes?