Few reasons housing will go down further.

Here is my research, why housing will have a trouble ahead.

1. High Inflation, risk of rate up is higher, so mortgage rate will remain higher for now. 30 Year Fixed loan is already high since Oct 2007. This is all with anticipation of Fed will reduce the interest rate by 750 basis point. So how much lower it can go?
2. Appraisals : Now lender is using their own apprizer, its funny they did not realize that, mortgage broker who are looking for their commission used their own appraisers to inflate the prices, to take new loan or take money out of house. Fannie Mae also will not buy the loand until they have their own appraisals apprise the value of underlying securities. More detail news here.
   
3. Tight Credit, LTV 75% : Most of the big bank like Wells Fargo (here is the news), already annouce to consider LTV to be 75%, so to get a better rate, one need to put 25% down. Same thing for refinancing, lot of homeowner would not able to refinance, even though the rate become lower.
4. There is a huge inventory, approx 10 month of supply, this will nothing but bring the price down. Mortgage delinquencies rate is going up, which bring more houses on the market. Today in WSJ, there was an article that people who afford to pay the mortgage they are walking out of the house, because the equity in the house is negative.
5. Job market is starting to get weak: First time claim is high since Iraq war. Consumer Confidence is down, lowest since 1992. The main reason for consumer confidence down was that people on the survey says that "its hard to find the job". IMO consumer confidence is forward looking econmomic number. And lastly, almost everyday I saw the news of layoff.

Needless to say the Credit Cruch is not over, CDO market is shaky and no one with confidence says that we see some good sign. This year we will see more and more Hedge fund will go bankrupt. This will wide spread the problem in the Financial and Real Estate Market.

Update 3/3/08 : Lender now required FICO 680 up from 660

Update 3/4/08 : Federal Reserve Chairman Ben Bernanke warned on Tuesday that mortgage delinquencies and foreclosures are likely to rise, with more declines in house prices