If the housing market is going to rebound, then the federal government has to be ready to expand an $8,000 tax credit to all buyers and to convince Fannie Mae and Freddie Mac to start buying jumbo loans.

Those were just some of the insights Florida Association of Realtorschief economist Lawrence Yun shared with members of the Greater Tampa Association of Realtors Thursday morning.

“We have the lowest mortgage rates since President Eisenhower but not with jumbo loans,” Yun said. “We hear about the 50-year low mortgage rates at 4.9 percent or 4.8 percent, but with jumbo mortgages, they still remain stubbornly high at 6.5 percent and 7 percent. Fannie and Freddie can’t buy those, so they have to charge a higher interest rate.”

At the same time help is needed to sell homes listing for more than $300,000, Yun said. “The government needs to raise the loan limit or get rid of the loan limit altogether if they want the housing market to stabilize,” he said.

“In the middle market, we are seeing a rise in foreclosures, and the high end will begin to suffer if there are no buyers. If there are no buyers, then they have to reduce prices, and reduce prices and reduce prices, and we’ll never find a bottom.”

Last year, many of the foreclosures hitting the market came from interest rate resets caused by adjustable rate mortgages. Now, however, other economic issues like job loss and other large bills are fueling that particular market, which is likely to stay strong through the rest of the year, Yun said.

“This area has had large job creation in recent years, but now we’re seeing job cuts that are much deeper than in past recessions,” Yun said.

One of the leading industries with job losses is construction, but financial jobs and business services aren’t that far behind, he said. In fact, the only areas that seem to be showing solid growth are education and health care.

“Independent of any political philosophy, the most likely occurrence is that there will be increased health care spending and increased education spending, so we’ll probably continue to see growth in those areas over the next four years,” Yun said.

On a broader scale, the United States is facing some of its biggest budget deficits ever, which could force the government to call on the Federal Reservemore, thus boosting inflation. Such a move could be good for homebuyers.

“In an inflationary society, the winners would be property owners as they would see their values rise,” Yun said. “If it’s a deflation, the losers would be responsible homeowners with mortgages.”

The signs are in place for a home sales rebound. During the economic downturn of the 1980s, home sales dropped dramatically because mortgage rates were rising from 10 to 18 percent, Yun said. In the most recent prior recession, following the Sept. 11, 2001, terrorist attacks, home sales actually rose mostly because mortgage rates were falling from 8 percent down to 6.5 percent.

“Today, it is 5 percent, and it’s likely to be 5.5 percent by the year’s end,” Yun said. “That represents great opportunity. Home sales can rise, even in a recession, when the mortgage rates are favorable. We may be facing an unemployment rate of 10 percent, which is a high unemployment rate, but that still means there are 90 percent of the people out there with jobs.”