According to the National Association of Realtors, the worst part of the U.S. housing setback is over but others are doubtful. The Realtors group said that the annual growth rate of sales of existing U.S. homes will be 6.29 million in the first quarter, erasing the five consecutive quarterly drops. About 15 percent of new home sales will recover during the fourth quarter of year 2007 wherein transactions is targeted to grow at an annual rate of 967,000 after dropping to 944,000 in the third quarter, the Realtors said further.

The spring season is going to be crucial in determining when it begins but the consensus shows that the recovery will be the year 2007, according to Todd Vencil, an analyst at BB&T Capital Markets in Richmond, Virginia.

Toll Brothers, a luxury home builder, said last week that housing demand may pick up next year except for Palm Beach and Broward counties, according to some experts.

Analyst Mike Larson of Weiss Research in Jupiter said he expects people to put their homes back on the market after the holidays which could add more glut even with the stabilization of mortgage rates and the number of homes for sale.

In view of the above, prices will continue to decline. Larson said further that a peak in supply and bottoming prices will contribute to a still weak 2007 market.

Brad Hunter, West Palm Beach housing analyst said that those investors who bought at the height of the 2005 boom might sell at a loss in which case more sales will occur, thereby this might contribute to the rebound of the South Florida market. But people are stubborn, he said.

March to June is the spring selling season where more than half of all U.S. home resales occur whereas the busiest time for new home markets starts in February. Building a typical house last for six months and most families want to move in September just before the school year starts.

Fannie Mae, the largest mortgage buyer expects home resales to gain in 2008"s second quarter, according to a latest forecast issued November 15. Freddie Mac, the no. 2 mortgage buyer, said last week that housing market will probably rebound in the last quarter of 2007.

John Lonski, chief economist for Moody's Investors Service, said that it will take three to five years to pass before housing starts and home sales return to their peaks. Sadly, sales of existing homes probably will sink 7 or 8 percent in 2007, in comparison with this year and new home sales may fall 9 or 10 percent, he said further.

NAR, the trade group, said that rates for a 30-year fixed mortgage will average 6.6 percent next year, the highest since 2001 at 7.2 percent. This year, the average rate will be 6.4 percent, the group said.