S&P’s chief economist David Wyss expects “home prices will decline by an additional 5%-7% from the 2006 peak before residential real estate prices start to stabilize in the first half of 2010, marking an overall decline of approximately 37% from the July 2006 peak.”  I would argue that it will be much worse than 5%-7%. Overall, the Case-Shiller housing index is off 33.1% since the top in July of 2006.  Another 5%-7% would mean that the housing market bottom would see a 40% nationwide loss.

The reason that Wyss feels the losses will extend is because of the Alt-A and Subprime mortgages still on the books.  The reason that I think that losses will be even worse than that is the accleration of unemployment WITH a stimulus package.  The stimulus package was expected to slow job losses by the 2nd quarter of 2009.  This obviously has not happened as we still seeing an increase in the national unemployment rate.

As I have stated many times in the past, if Americans do not have jobs and they continue to see an up trending unemployment chart, the economy is not going to get better.  Part of the battle that President Obama is having is the psychology of the overall economy.  Just trying to convince Americans that things are getting better is an uphill battle that he is not winning.  The Obama Refinance plan was an attempt, but that seems to not be working that well either.  There are good reasons why Americans do not believe this, but if there was any positive sentiment, we would likely see “some” improvement.

The worst part is that mortgage rates are likely to rise in the next few weeks which is exactly what the housing market does not need.  No one knows when we will see a bottom in housing, but maybe after average mortgage rates rise and we flush out most of the foreclosures and short sales we might see a bottom.  This will obviously take quite a bit of time, but it needs to happen sooner rather than later.

If you have been smart with your money and saved for a “rainy day” you may get the opportunity of a lifetime this year.  That rainy day may very well be today.  Every housing market documented in the Case/Shiller Housing Index has seen steep declines since the housing top of June 2006.  There are some markets that are down well over 40% including Phoenix, Detroit, Los Angeles and Miami.  Even though the entire country has yet to see steep declines, it is the overall sentiment of the media that the housing market is dead.

With this being the sentiment, very people people are willing to buy a new home because they fear the value dropping immediately.  With new home sales being stagnant, there is a great deal of room for those who want to refinance, which in turn could cause refinance rates to decrease even more.  When President Obama and Ben Bernanke first announced the trillion purchase of MBS many analysts feared that those who did not get in early would not be able to find funding for their loan.  This is just not the case as the housing market continues to struggle great.

Take a chance and apply for that refinance you have always wanted.  You never know, that rainy day you always worried about might be the most opportunistic day of your life which is an extremely low refinance rate.

For the first seven months of this blog I have opened up the forum to a few readers who had the desire to post their feelings through articles.  After realizing how much passion some of the readers have for the current economic crisis and the mortgage industry, I am going to allow YOU, the reader, to send me articles to post.  The only requirement I demand is that you have PASSION for what you write and it must involve the housing industry.  I would actually prefer you to be strongly opinionated as that is the point of this blog.  If you are interested in writing every once in awhile or every single day please email me at jwojdylo@subprimeblogger.com.  I look forward to posting your articles and getting engaged with the reader.

This does not mean that I will stop producing articles.  As many of you know, I am quite opinionated and I will make sure that my beliefs and opinions are still represented through this blog.