Housing MarketTo Dip Again Mid Spring 2010

In an article written by CNBC Real Estate Reporter Diana Olick, Predictions 2010: Real Estate, it is predicted that the residential housing market will dip again in mid-2010 before settling into a recover in the back half of the year.This is a result of the end of government programs that have been artificially keeping the housing (home buyer tax credit and Fed’s Fannie Freddie Mortgage Purchase Program) market afloat and will result in a slowdown in demand right at the height of the spring season. Foreclosures will also be on the rise and push more inventories onto the market, putting additional downward pressure on home prices.

It is also a general consensus by those in the industry that inventory will be a lot higher than the original speculation. What we call shadow inventory should be seen not just as homes the banks are holding on to or that are still in the foreclosure process, but homes where borrowers have stopped making payments and have not heard from the banks.

This will also be the end of historic lows on the 30-year fixed. It is noted that unless the government decides to extend its Fannie-Freddie purchase program or do something else to juice the credit markets, mortgage rates will rise steadily, probably leveling off somewhere around 6 percent.

http://www.cnbc.com/id/34110130/Predictions_2010_Real_Estate