NationalMortgageNews says there were 2.4 million homes for sale at the end of the first quarter, 20 percent fewer than a year ago, which has helped stabilize prices for now. However, the 2.2 million homes in the process of foreclosure, and another 1.7 million homes where the owners are three or more payments behind may drive home prices down even further. To stem that tide, banks are focusing on reducing foreclosures, either through short sales or loan modification. The 23 % of all homeowners who have underwater loans is making it difficult for them to sell their homes and buy one they can more readily afford, further reducing the demand. MHProNews.com notes tight credit is also a barrier to home sales, and with wages having stagnated for years, and unemployment at eight percent and not anticipated to fall until next year, a full housing recovery remains on the horizon.
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