The National Association of Realtors says existing home sales were below a year-ago in most states, but home price trends continue to improve. Economists say that mortgage money is drying up, but The Mortgage Bankers Association says loan applications and refinancings are up due to softening interest rates, and Freddie Mac is coming to the rescue for the next 90 days to buy Alt-A loans to package into securities.

The Dow is down over 1,000 points from just two weeks ago over fears that the subprime crisis has dried up enough loans that housing will finally bring the economy down, but most consumers believe the economy is still in "fair" shape.

Weighing arguments whether housing is down for good is like watching a tennis match with a bad hangover.

In NAR's second quarter report, 97 out of 149 metropolitan statistical areas showed year-over-year increases in median existing single-family home prices, including nine areas with double-digit annual gains; 50 had price declines; and two were unchanged. In the first quarter of 2007, revised data shows 83 areas had annual price increases, while in the fourth quarter of 2006 only 68 areas were up, so that's a significant and encouraging improvement.

Lawrence Yun, NAR senior economist, said, “Although home prices are relatively flat, more metro areas are showing price gains with general improvement since bottoming-out in the fourth quarter of 2006,” he said. “Recent mortgage disruptions will hold back sales temporarily, but the fundamental momentum clearly suggests stabilizing price trends in many local markets.”

However, transactions have slowed to the point that total existing-home sales, including single-family and condos, were at a seasonally adjusted annual rate of 5.91 million units in the second quarter, down 10.8 percent from a 6.63 million-unit pace in the second quarter of 2006. Only six states showed increases in the sales pace from a year ago; one was unchanged and complete data for two states were not available.

Further, the national median existing single-family home price was $223,800 in the second quarter, down 1.5 percent from the second quarter of 2006 when the median price was $227,100.

But, that's not a lot considering the stock market seems to fluctuate that much every day, lately.

From subprime to jumbo loans, or any mortgage product other than a conventional loan, banks are discontinuing the easy money that helped fuel the housing boom between 2001 and 2005. The good news is that conventional loan interest rates are dropping, which may stimulate more mortgage applications. The bad news is that alternative loans, including the once-golden jumbo mortgage is significantly more expensive. But because Alt-A loans have less chance of defaulting than subprime loans, Freddie Mac has announced a 90-day program in which the government-sponsored enterprise will free up some more mortgage money by buying Alt-A loans from certain banks.

Call it the smoker's tax. Like smokers and drinkers pay more city/state taxes to buy their goods, mortgagees will pay higher interest rates to get loans if they are going any direction but conventional. And it will be one of the few times the rich won't get richer, as the spread between conventional and jumbo loans has increased, despite lower delinquency rates.

In its Weekly Mortgage Applications Survey for the week ending August 10, 2007, the MBA says that loan applications increased 3.4 percent from the previous week, and so did refinancings (2.6 percent) as consumers took advantage of softening interest rates.

Upbeat U.S. voters (42 percent,) according to a Reuters/Zogby poll, believe the economy is doing fairly well. Twenty-seven percent say it's in good shape, and eight percent say the economy is in great shape.

Like the other contradictions, voters (38 percent) also say they believe the economy will grow slowly, and 26 percent believe it will be stagnant. Less than three percent say the economy is likely to grow at a fast pace.

Published: August 16, 2007

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.