Unemployment is not respecting income boundaries.  It’s affecting rich people, poor people and middle-income people and they all have mortgages…That’s taking some of the pressure off. Hopefully in 2010 we’ll see some recovery.

—Karl Case

There will be continuing foreclosures, and not just subprime, it will be prime mortgages. This is creating a huge shadow inventory of homes that are still owned, but they’re going to be on the market in the next year or so. I do see some signs of animal spirits, but it’s a mixture…It would be entirely plausible that we would have a weak housing market for many years.

—Robert Shiller

If you have a prime adjustable-rate mortgage resetting in 2010, you probably are going to see your rate go down. Still, prime ARMs are defaulting at a higher rate because these borrowers were the risk-takers who chose the initially lower payments so they could stretch to get into a house…Even if the jobs start coming back, where are they coming back? If it’s in Texas or Oklahoma, it’s not helping people in California or Rhode Island…At the moment a lot of potential buyers are deciding to wait and see. If they do have a job, they may have seen 20 percent of their company laid off and they’re wondering if they’re next.

—Jay Brinkmann, Chief Economist at the Mortgage Bankers Association