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When you’re one of the country’s most-respected real estate analysts and consultants, a lot of people want to know what you think will turn this market around. John Burns tells The Real Story that a year ago, if he had said, “Interest rates at 5%,” his clients would have shaken their heads at the impossibility of ever seeing that happen.

But here we are, 100+ days and counting with the Obama administration, and we are seeing a complete anomaly—interest rates that seemingly drop weekly—engineered by the Fed, to help banks earn their way out of their mess.

For the consumer, it means that low interest rates and low prices make for the best affordability numbers since 1972. The Federal tax credit and the California tax credit offer incentives up to 18%. So why aren’t people buying homes?

The fact is: people ARE buying homes—new, resale and foreclosure. More than half of the $100 million set aside for the California tax incentive program is already gone, as about 500 people a week get off the fence and get into the new home market. But they are buying inventory, or already-built new homes, so the new home sales aren’t tipping the industry back into a healthy numbers of starts and the attendant job creation that goes along with a building industry that’s actually building.

John Burns thinks that there are still large numbers of potential homebuyers that aren’t even looking, because their eyes are on another figure that keeps moving—unemployment growth. John’s forecast says that national unemployment could go as high as 12%– “a horrible number”, but that unemployment among the college educated is relatively lower, with people finding another job within three or four months. And, he says, “88% of Americans are employed, and that’s a number that you have to focus on.”