From the WSJ:

Home-Price Watchers Hope Drop Slows
By MAYA JACKSON RANDALL
August 25, 2008; Page A2

This week’s housing-market data won’t erase the souring situation surrounding Fannie Mae and Freddie Mac, but there still might be a way to make lemonade.

Start with the S&P/Case-Shiller home-price-index report due out Tuesday. It will likely show continued price declines across the country as the housing slump drags on. Those are the lemons. To sweeten that up, look to the rate of price declines in hard-hit markets such as those in California and Florida. If the rate of declines slows, as some experts expect, there is your sugar.

The data are likely to be “negative pretty much across the board” and home prices are unlikely to bottom out until 2009 or 2010, said Mark Vitner, a Wachovia senior economist. But Mr. Vitner expects the rate of decline in home prices to begin to moderate “at some point in the second half of the year.” That could signal the worst is behind us, though Mr. Vitner says he thinks the market could easily sit at the bottom for at least a year.

At the same time, it would be souring if the rate of declines accelerates. All eyes are already on Fannie and Freddie, and data showing home prices plummeting more than expected wouldn’t help the mortgage giants.

“The more housing prices fall, the more foreclosures we get and the more each one of those costs Fannie Mae and Freddie Mac,” says University of Maryland business professor Peter Morici.

The week is chockablock with housing data. Existing-home-sales data, released Monday, will be interesting to watch. While economists expect a slight uptick in sales, it could be bittersweet — the result of troubled banks having to sell foreclosed homes at a deep discount. “I think the story there is simply that you have a lot of foreclosures and banks are pricing the homes so they sell,” said Global Insight U.S. Economist Patrick Newport.

On Tuesday, the Office of Federal Housing Enterprise Oversight will release its monthly home-price data through June. Additionally, the Commerce Department Tuesday releases data on July sales of new homes. Last month’s decline in sales was the fifth in six months.

From Bloomberg:

Home Sales Probably Held Near Decade Low: U.S. Economy Preview

Home sales in the U.S. probably teetered near a 10-year low, property values dropped and consumer spending cooled, signaling the economy has taken another turn for the worse, reports this week may show.

A total of 5.435 million new and existing homes were purchased in July at an annual pace, according to the median estimate of economists polled by Bloomberg News. June’s 5.39 million rate was the weakest since at least 1999. Spending probably rose 0.3 percent in July, half the prior month’s gain.

The real-estate recession will persist into next year as stricter lending rules and higher borrowing costs shackle demand. At the same time, equity is disappearing as home prices fall, and wages aren’t keeping up with inflation, depriving Americans of the means to maintain spending, the biggest part of the economy.

“The economy is going down a shaky path,” said Maxwell Clarke, chief U.S. economist at IDEAGlobal Inc. in New York. “We’re not going to see a rebound in housing anytime soon. Consumers are living hand to mouth, and the outlook for spending is very weak.”