It's going to be bad. With Subprime lenders going under, there is a need again for FHA loans, but they are slow as hell, filled with unneeded paperwork and not very well known to new home buyers. If FHA loans can be revamped a bit, then it can help the problem. But either way it is going to get really bad. ARMS are adjusting everyday and people owe more than the house is worth, so they are going from a 6% or so, to 15% in some cases with absolutely nothing they can do about it. That means more and more foreclosures. It's a great time to buy though, and even invest in Apartments or other rental properties, people gotta live somewhere.