It's a mixed, and somewhat gloomy, forecast for the housing market this week.

Concerns over the Fed's announcement to buy up Treasury bonds had far reaching effects. According to The New York Times, "When the United States Federal Reserve announced last week that it would buy $600 billion in Treasury bonds to help bolster the economy, it quickly came under attack from Germany, Brazil and China, which said America was trying to devalue the dollar to the detriment of other nations’ exports." Others worry it may undermine the global economic recovery.

Analysts also contend that the Fed's actions could signal our level of indebtedness to other countries, who have been actively engaged in buying up Treasury bonds.

But governor Kevin Warsh, from the Federal Reserve Board of Governors, took concerns even further. At the Securities Industry and Financial Markets Association, he spoke about how "after a cyclical boost early this year, the current state of the U.S. economy is unimpressive: modest growth in output, high levels of unemployment, stagnant wages, low levels of consumer and business sentiment, and volatile financial markets." He says what some economists call "the new normal," he calls the new malaise.

Warsh made it clear, however, that sole responsibility does not lie on the Federal Reserve to invigorate the market. He said policymakers "should set their sights higher than merely coaxing businesses to do today what they would otherwise do tomorrow." He noted that the supply side of our economy deserves more of their attention.

In housing, pending home sales are down, as well. The National Association of Realtors latest Pending Home Sales Index indicated that sales slipped 1.8 percent in September.

Lawrence Yun, NAR chief economist, said there is a mix of factors in the housing market. "Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead," he said. "Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves. However, tight credit and appraisals coming in below a negotiated price continue to constrain the market."

Regionally, pending sales fell in all areas except the West, which instead saw a 3.5 percent rise.

All regions are still around 20 to 30 percent below pending sales for September 2009.

Published: November 15, 2010

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Carla Hill, M.A., works on the Realty Times staff as Managing Editor for our online publication. She also is Producer for the real estate news channel, seen daily on RealtyTimes.com and on video newsletters nationwide.