How Healthy Is The Housing Market? (UPDATED)

I have a few questions for you.  How many of you believe that the housing market is recovering, stable, and has a floor underneath it?

After reading the following article, what do you think is about to happen, and does it have anything to do with the pipeline from The Treasury to Fannie and Freddie?

Stakes are high as government plans exit from mortgage markets

For more than a year, the government pulled out the stops to revive home buying by driving down mortgage rates.

Now, whether the housing market is ready or not, the government is pulling out.

The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble, and it would deal a body blow to President Obama‘s efforts to get the economy on track.

Keeping the mortgage rates at historic lows, which required a commitment of more than $1 trillion, was viewed within the administration as a central plank of the economic strategy last year, senior officials said. Though the policy did not attract as much attention as rescue efforts to bail out banks, it helped revitalize home buying in some parts of the country and put money in the pockets of millions of homeowners who were able to refinance into lower monthly payments, the officials added.

Have they delayed the correction, and are we looking at whiplash in March?

UPDATE: This story hit Drudge this morning:

December home sales down nearly 17 percent

Home sales plunge nearly 17 percent in December after tax credit deadline extended

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