According to data released by Realtor.com, the 2010 economic outlooks shows interest rates creeping up slightly from the 2009 average for 30 year fixed rate mortgages of 5.1% to 5.5% for 2010. However, it is anticipated that the Fed will not make any rate changes until at least the second quarter of 2010.
Unemployment figures are still gloomy. It is predicted that they will jump from 9.3% in 2009 to approximately 9.9% for 2010.  With so many people out of work, it is anticipated that home foreclosures will rise also despite the government's efforts to help distressed homeowners with The Home Affordable Modification Program and The Home Afford Refinance Program.   Now with the government's new guidelines for short sales recently released, the government is hoping to get lenders and loan servicers to approve more short sales and deeds in lieu of foreclosure to help to reduce the record number of foreclosures we have been experiencing the last two years.
The good news is existing home sales for the 4th quarter of 2009 were up 27.5% from the 4th quarter of 2008. The National Association of Realtors reported that all regions of the country showed strong increases in the number of home sales during November 2009. Sales in the West rose 10.6% over the previous month and 28.1% over sales in November 2008.   The Midwest home sales increased 8.4% over the previous month, and they were up 53.5% over November 2008. Sales rose in the Northeast by 6.6% from October and were up 52.7% since November 2008. The South saw existing home sales rise 4.8% over October and were up 44.8% over November 2008.

It is expected that number of existing home sales will rise from 5,197 in 2009 to 5,710 in 2010.   The government's first time home buyer $8,000 credit and the $6,500 home credit for non-first time buyers should help to improve home sales the first quarter of 2010. Buyers must have enter into a  binding contract to buy a principal residence on or before April 30, 2010, and close on the home by June 30, 2010 in order to qualify for the tax credits.
Other data from Realtor.com reflects median existing home sales for 2009 showing an increase from $172,700 in 2009 to approximately $179,100 for 2010. Median prices for new home sales for 2009 were $213,400 and are expected to rise to approximately $221,300 for 2010.

So all in all we are not out of the woods yet though. The economy is still fragile. But real estate industry experts are hopeful that home prices will stabilize during the second half of 2010.

Source: http://www.realtor.org/research.nsf/files/currentforecast.pdf/$file/currentforecast.pdf