If you want a good sense of where we are in housing and where we're headed, check out the latest forecast from Fannie Mae chief economist Doug Duncan.

Never known as a Pollyanna or wild optimist, Duncan acknowledges that this summer has been a challenging time for just about anyone in real estate.

The slump was widely predicted earlier this year by economists -- including Duncan -- who saw sales and building starts essentially sucked out of the summer months into the spring months by the expiring tax credit deadline in April.

Though there's a statistical lull at the moment, Duncan sees some positives taking shape: "Consumers are lowering their leverage" he says-cutting their debt burdens - and "positioning themselves to resume consumption" - including home purchases.

But they're understandably worried about the unemployment situation and not sure how solid the economic recovery is going to be.

Despite all this, Duncan suggests in his forecast, "the upside potentials are there." He sees modest economic growth for the balance of the year - around a two and a half percent expansion in the GDP or gross domestic product.

Duncan's colleague at the National Association of Home Builders, chief economist David Crowe, has a similar outlook.

New construction by builders "is essentially in a holding pattern" at the moment, says Crowe, constrained by the country's persistent high unemployment. In the Census survey released last week, starts of new housing were up 1.7 percent, but single family starts were down by four percent.

Despite that, Crowe believes that favorable home buying conditions "are taking shape for consumers, led by "historically low mortgage rates and low (home) prices."

Together these factors "should help spur additional demand (later this year) as the job market gradually improves."

One of the encouraging signs out there to spur that additional demand is the relative strength being shown on the pricing front. According to the latest survey by real estate data company Corelogic, most areas are seeing either stable prices or modest growth in home values.

Corelogic found that homes nationwide gained one point four percent last month in market value on average -- the fifth straight month of increases.

Many local markets did better than that, like Maine and California where prices gained 6 percent, the District of Columbia at 5 percent and Virginia at 4 percent.

There were some negatives in the same survey: Oregon, Washington state and New Mexico were down by more than 3 percent, but overall the price direction was up.

That sort of report, in turn, gives potential buyers confidence about something important: They won't lose money on a house they buy today.

Published: August 23, 2010

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.