A number of economists are concerned that the federal economic stabilization plan does not take into account home-price declines, which push down consumer spending and drive up default and foreclosure rates.
REALTOR®Magazine
Martin Feldstein, an economist at Harvard University, believes 20 percent of homeowners' mortgages should be replaced by low-interest government loans to prevent the declines in net worth and consumer spending that will result if the government does nothing about residential depreciation.

Meanwhile, Richard Green of the University of Southern California's Lusk Center for Real Estate Development says more lenders need to participate in the Hope for Homeowners Program; and Columbia Business School Vice Dean Chris Mayer insists that demand for houses would rise if the government lowered mortgage rates to 5.25 percent.

Data from Zelman & Associates shows that higher FHA loan limits are helping, with mortgages financed by the agency rising to 28 percent last month from 19 percent in August.