While previous declarations or predictions that the market would improve, have so far been wrong, last Wednesday during a housing forum by Standard & Poor´s and the Chicago Mercantile Exchange, several participants seemed to reach a consensus that the market is going to stabilize this summer. Among these participants was Mark Zandi, chief economist for Economy.com; Charlie Himmelberg, an economist for Goldman Sachs; David Blitzer, managing director for S&P; and Beth Ann Bovino, senior economist for S&P.

Zandi, recent author of ¨Financial Shock¨ which gives his view on why the mortgage crisis took place, said that "The bottom of the housing market is coming into view,...House prices, based on the S&P Case-Shiller index, are down 20% peak-to-trough and I expect them to fall another 5% to 10%." He then went on to explain that the decline in house pricing will began to boost affordability, which in turn will lead to market stabilization. A sign of this maybe be that the amount of homes sold each month has already reached a kind of stabilization, putting an annualized total of perhaps 5.5 million units per year.

Bovine had a slightly different forecast then Zandi, she feels that they are currently in a recession and a such prices will fall about another 10%. Because of buyer fear to jump back into the market, she thinks that prices will go further down then the supposed bottom out price, hitting an ¨overshoot¨. Himmelberg added his prediction, that once prices bottom out, they will remain flat or about a year or so before picking up.

Everyone was in agreement that the government possession of Fannie Mae and Freddie Mac will be a positive thing for the market. Zandi said that, "We expect Fannie and Freddie to be more aggressive [in buying loans] over the next few months,"...We are at a low point in credit availability right now." Of course, the panelists also agreed that there could be some issues on the rise with the presidential election in Nov., mainly a fear that Fannie and Freddie will be downsized by a new administration. Blitzer remarked that, "Neither candidate, has decided what they want to say about that."