Will homes rebound?

Best case: Housing market hits bottom this fall, bringing an end to the recession by next spring. Buyers step into the market and foreclosures level off. Home prices stabilize.

Worst case: The housing market continues to sink in 2009. More people lose their homes in foreclosure, flooding the market with distressed properties. Home prices tumble, prompting consumers to pull back even more.

The reality: Home sales increased in April and May, the first year-over-year rise since 2005. The median price still fell because sales are concentrated at the lower end of the market, which is swamped with foreclosure properties.