There is definitely a housing bubble, but the good news is that it exists in only 20 big cities, according to economist Scott Franklin, a featured speaker at the MBA's Commercial Mortgage Asset Administration and Technology Conference in Nashville.However, these cities contribute to 50% of housing wealth in the United States overall, Mr. Franklin said. About the prospects for the economy, he said there are two distinct views, one bullish and the other bearish. To the bulls, indications point to gradually rising interest rates rather than large jumps, the way the Federal Reserve acted to raise rates in the recovery of 1994, according to Mr. Franklin. As for those in the bear camp, they say, "Wait a minute, this recovery is not built on rock -- it may not even be built on sand," he declared. The bears point to factors such as a high debt-to-income ratio for consumers and the fact that many homebuyers are using adjustable-rate mortgages, leaving economists speculating about whether they have long-term plans for the properties they are buying. Another point of concern is that homebuyers are paying prices that are out of line with property values, causing some to speculate about a conspiracy among appraisers, Mr. Franklin said.

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