NPR had a story yesterday detailing the cost Fannie Mae is incurring, to keep up with the 150,000 homes it owns due to owner mortgage default.
Well, hell, you might say, why not just go ahead and sell them, so we don't have to pay for their upkeep? Without getting into the financial wisdom of selling now or later, I will simply present this as evidence that the housing market is weighed down by all that shadow inventory. Everyone is waiting for this inventory to come to the market. With the shadow inventory staying in the shadows, the market cannot adequately price the houses on the market now. So buyers are holding out for more certainty. Fannie Mae's action is preventing the market from hitting bottom.