The 23.3 increase in the annualized rate of home sales in the third quarter was the largest in 20 years, but it came from “extremely depressed” levels.

They project that housing starts will surge by 35 percent next year, from a recent historic low.

Fannie Mae expects national home prices to stabilize next year, with a median resale price of  $170,800, down 0.2%  from 2009 and a 22% from 2007.

Although new-home sales fell in September after five consecutive months of increases, the months’ supply of new homes was unchanged at 7.5 months.

At 11% the third-quarter rental vacancy rate was the highest since record-keeping began in 1965. That has depressed rents and stagnate wages should keep short-term interest rates low in 2010. 

Mortgage originations are expected to plunge 29% next year from 2009 levels this year’s refinancing boom comes to an end. Also, interest rates for 30-year fixed-rate conforming mortgages are expected to rise from an average 5.07 % this year to 5.42% in 2010.

All in all, the continued low rates, tax incentives and stable prices should keep the buyers buying and the savvy agents busy.  

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