The good news is that the bad news could have been worse

Home Sales Rise Unexpectedly in Feb.: Financial News - Yahoo! Finance:
"The increase pushed sales up to a seasonally adjusted annual rate of 6.69 million units, still 3.6 percent lower than a year ago. Sales fell by 8.5 percent for all of last year as housing hit a sharp slowdown after setting sales records for five straight years."

For a little added perspective, scroll down to my entry "What are these people thinking?" on March 23. There you will note that the overhang of existing vacant homes as of Q4 2006 was 16.7 million, so an annual rate of 6.69 million existing homes sold would only reduce inventories by less than half. And that assumes that all the new homes built this year will be sold. Meanwhile, new housing starts are at an annualized 1.525 million.

As lenders to the least qualified buyers begin some serious belt-tightening, my guess is that the smart money - if it stays in housing at all - will shift to rental property which has it's own pitfalls which I know quite well. All my years growing up - from about age four till I was in high school - my mother was resident manager of apartments in the DC suburbs while her mother was managing buildings in the city. And, as constable for over a decade I handled more rent collection and eviction actions than I could count.