Meredith Whitney — the banking analyst who was one of the few to warn of the financial crisis ahead of time, and who has maintained a pretty gloomy outlook since the crisis — is now seeing some positive signs in the economy.

Whitney tells Maria Bartiromo in an interview for USAToday that she thinks defaults from overstretched municipalities are likely, but that conditions are improving. “Every day things get better because politicians are addressing the fiscal challenges more aggressively,” she says. “Since November you’ve had more governors take strong austerity measures. … Every day the situation gets more focused, and that means it’s closer to finding a fix.”

Whitney also discusses the housing market, which she thinks is headed for more declines. “House price declines appear to have decelerated, but that will prove to be a head fake because you have the foreclosure moratorium that hit in November and December, and that will show up in the next few months,” she says. “Banks are resuming their foreclosure process, so you’ll see more property come on the market that will have a significant pressure on home prices. Home prices will be down another 8%, 10% in the next 12 months. That’s going to be a real drag on the economy.”

But, she adds, “there are parts of the economy that are doing very well” — namely, food producing areas in the middle of the U.S.

While states that seriously overstretched their budgets in recent years will struggle, Whitney says those food-producing areas are poised for growth. “It’s the central part of the U.S., you can almost draw a triangle around it, what I call the emerging markets of the U.S,” Whitney says, referring to states like Kansas, Missouri, Iowa, and Texas. “It speaks to how dynamic and strong the U.S. economy really is.”

What’s all this mean for investors? Whitney says she expects the markets should do well for the next couple months, but then run into trouble after June “as housing starts to decelerate again as foreclosures resume and inventory really comes on the market”.