C-Span interviewed Lawrence Yun today, and once again he was fascinating. Apparently, the housing market will improve if more people get jobs. High unemployment is the reason the market has not turned around and the reason that there are more foreclosures now than a year ago. So, we have high unemployment caused by a recession precipitated by the housing collapse. The solution is to not have high unemployment? He might as well have said that the problem will go away when more people buy real estate.
A caller said that he felt that the problem existed because banks charge compound interest on home loans, and more people would buy homes if they only charge simple interest. Dr. Yun responded that the lack of competition among banks is responsible for this. If there were more banks, competition would force them to end the practice. What the heck does compound interest have to do with a loan? Can anyone explain, please?
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