MBA: Foreclosures, Unemployment To Peak in 2010

San Diego, CA, Oct. 14, 2009--Foreclosures will top out by the end of next year and unemployment will swell above 10 percent, Mortgage Bankers Association chief economist Jay Brinkmann said Tuesday.

Brinkmann, speaking 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.

But the strength of any rebound will depend on whether consumers will increase spending, Brinkmann noted.

"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," Brinkmann said.

He noted that economic activity will likely slow again in the first half of next year but pick up in the second half. However, he expects unemployment to peak at 10.2 percent by mid-2010 and not fall below 8 percent until late 2012.

Brinkmann projects that home resales will increase by about 11 percent over 2009 levels.