The main question that everyone keeps asking regarding the housing market is: when are people going to start to buy again? Last week we saw a little encouragement in this area, as mortgage applications rose a bit higher, possibly in reaction to lower interest rates.

Almost everyone agrees that the troubled housing market is a key ingredient to the current economic troubles that the American economy is dealing with, but today we got a bit of good news, as mortgage applications reportedly rose by 11.9%.

Last week's move is a nice sign, but we also have to remember that just the week before, we were looking at applications running at their lowest level since all the way back in December 2000, so we can't allow ourselves to get too excited over today's news. We still have a long way to go before the country is able to crawl its way out of the current housing melt down.

As home prices continue to weaken, more and more homeowners are facing the real possibility that their homes will wind up "underwater" before the market starts to rebound. Of all the areas in the country that are facing tough times, the worst of times are being felt in the California city of Mountain House.

So what exactly does it mean to have your house underwater? Simply put, a mortgage goes underwater when the balance a homeowner owes on his house is more than the house is worth.

Just how bad has the situation gotten in Mountain House? The figures are staggering. According to figures released yesterday, roughly 90% of all homeowners in Mountain House are now facing mortgages that are underwater. Nine out of every 10 homeowners woke up this morning facing the fact that their home values have been in free fall and there is little that they can do to correct the current situation.

I have been writing a lot lately about all the negative indicators that we see coming out of the housing market, so it is nice to have some positive news to discuss today! The good news comes from the Commerce Department, which announced that sales of new homes in September rose by an unexpected 2.7%.

While any rise in home sales is reason to celebrate, the jump in September is much sweeter since analysts had been planning on actually seeing a drop in the month.

On the other side of the coin, one of the main reasons why we saw such a nice jump in sales during the month could be related to the continuing decline in home prices. During the month, the median price for new homes sold was $218,400. This figure is the lowest that the market has seen since all the way back in September 2004, and marks a 9.1% drop from the same month last year. Not the best of news for homeowners out there that are already concerned about their falling home values.

More bad news on the struggling housing market today, as the Mortgage Bankers Association announced that last week mortgage applications dropped to an eight year low. This is another sign that people are not ready to jump back into the housing market just yet.

As we all know, home prices have been falling steadily over the past year, and we are all waiting to see the point where buyers decide that the price is right to jump back into the market. So far, that is just not happening. According to today's report, mortgage volume was 44% lower last week than the same period last year.

Refinancing applications were down 23.5% last week, and more importantly, mortgage applications to purchase new homes fell 10.9% from the previous week. The last time weekly volume was this low was all the way back in December 2000.

With all the negative news that we have seen lately, it's nice to hear one piece of positive news regarding the housing market. We got that today on news that pending home sales rose unexpectedly in August.

The National Association of Realtors tracks home sales in its index, and reported today that its pending home sales index rose from 87 in July up to 93.7 in August. Going into today's report, analysts had been expecting to see the index actual fall, and were thinking that we would see the number drop down to 86 in the month, so the increase was definitely a bit of good news in an otherwise rocky market.

The areas of the country that saw the best jump in July were the same ones that have been beaten up the most over the past year, including California, Nevada, Florida, and Arizona.

As Washington tries to come up with an agreement on how to solve the current economic crisis, we received more information today on just how bad things are getting, as figures show new home sales were very weak during the month of August.

As the credit crunch and falling home values continue to apply pressure to an already weak housing market, the Commerce Department announced today that new home sales in August fell by a sharp 11.5% in August, resulting in a seasonally adjusted sales rate of 460,000 new homes. To find the last time we saw a rate this low, we would have to look all the way back to January of 1991.

As always, Wall Street likes to compare actual numbers to estimates. Had economists been expecting to see a 10% or greater drop in new home sales, that would be one thing, but that was not the case. Going into today's report, economists were expecting to see new home sales fall, though not nearly the 11.5% actual rate, but a much smaller drop of only 1% in the month. So today's reported sales figures are definitely going to add to the confusion that many are feeling regarding the housing market.

Today's housing news on new home sales in July sounds eerily similar to the post I wrote yesterday about July existing home sales. In both cases, we are given a quick headline that sounds like good news, but once you dig into the details a little deeper you realize that the news is just not as pretty as it first sounds.

Let's first take a look at the positive headline: New home sales rise in July. Great, this is exactly the sort of news that the market needs to hear. After all, weakness in the housing market has been a major catalyst to the current economic slowdown, so any good news is like a breath of fresh air. During July the market saw a jump of 2.4%. Not too shabby.

But what does this really mean?

In the current housing market, it has been hard to find any sort of silver lining, but we do see a little positive news today, as existing home sales in July jumped more than expected, mainly due to lower home prices.

During July, sales of existing homes rose by 3.1%. This was well above the 1.6% that Wall Street was hoping to see, but analysts caution against assuming that this is a sign that the market has finally bottomed out. Despite beating Wall Street estimates, we still have to consider the fact that home sales were over 13% lower than the same period a year ago.

While we can view the July sales figures as promising, we must also take a minute to look at home inventories, and here the picture is not so rosy. Here we see that the number of unsold single family homes is running at all time highs. Currently the market is trying to deal with a total of 4.67 million unsold homes. This is the highest level that we have seen since 1968 when the National Association of Realtors started monitoring the data.

Chances are, if you follow the economy at all, there are two things on your mind, oil and housing. Despite a couple days in a row of oil selling off, it seems like high oil prices are here to stay for a while. And housing continues to remain weak, with signs pointing to more weakness in the months to come.

I am sure you are as sick of hearing about homes sales as I am, but unfortunately it is something we have to look think about, and today we get more bad news, as the National Association of Realtors announced that May was yet another tough month for pending home sales. In fact, with a reported 4.7% drop in pending home sales, May was the third lowest month on record, a sign that tough times are still here, and probably going to be sticking around for a while longer.

First, let's get a better idea of what exactly we are talking about here. What are pending home sales? Simply put, a home sale is pending when there has been an offer made and accepted, but the deal has not yet closed. The lag between the acceptance and the closing is typically one to two months. The index to track this was started back in 2001, so to get to a 100 rating, you would have to have the average level of sales activity that we were seeing back in 2001.

The housing market can use all the good news it can get, and the latest news out of Southern California is definitely good, as home sales in the month of April reportedly jumped 22% in that part of the state.

California has been hit pretty hard in the recent housing crunch. Of course, the reason why California has been so hard hit is because it was also one of the states that had the best growth during the housing boom.

The flip side of the story is that the rise in home sales was mostly led by bargain hunters who swooped into the market and picked up foreclosed properties. According to the report, 38% of the homes purchased last month had been involved in foreclosure procedures at some point over the past year.

April saw a 65% increase in foreclosures from the same month a year ago.

The numbers pretty much speak for themselves, with 243,353 receiving notices in April. This is a vast increase from April 2007, when "only" 147,708 homes received the same notice. This was also a 4% increase from March. The numbers are based on a report from RealtyTrac Inc.

Homeowners in California and Florida are among the hardest hit. The two states had 9 metropolitan areas that ranked in the top ten areas of the country in terms of foreclosures.

Luxury homebuilder Toll Brothers Inc. (NYSE: TOL) stated that it was still looking for the light at the end of the tunnel when it reported preliminary first quarter earnings, which marked the seventh straight quarter of declining revenues.

During the quarter, the company had a 22% drop in revenues from the same period last year. The company is getting hit from a couple of different angles including falling home prices. On top of that, the average number of canceled home orders has also been on the rise. Finally, the company reported that the number of signed contracts dropped 46% from the same period last year.

Across the nation, Toll is seeing weak conditions in most areas, and expects the current challenges to continue for some time. The company compared the current situation to that of the Titanic, "things don't turn on a dime". Interesting comparison for the company. When companies start to compare their industry to the fate of the Titanic, you really have to start to wonder just how bad things have gotten, or are about to get. It definitely doesn't paint a pretty picture if you ask me.

Shares of the stock are down about 1% this morning in the premarket. The company is due to report complete first quarter numbers on February 27.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

After months and months of dreary news from the worlds of housing and real estate, here's a bit of a pick-me-up: applications for mortgages rose 32.2% during the week of January 4, which was shortened by the New Year's holiday. This was a welcome change, as demand had been heading lower for the three previous weeks.

The Mortgage Bankers Association said in its weekly findings that its overall application index rose to 706 from 533.9 the previous week. Holiday-season volatility could be partially responsible for this jump -- in the week surrounding New Year's Day 2007, the application index was 16.6% higher.

Refinance volume spiked 53.9% during the week, while purchase activity was up 14.7%. Refinance applications accounted for 57.7% of total applications, up from 50.9% the previous week. (With all the speculation surrounding future rate cuts, wouldn't homeowners want to wait and see what happens at the next Federal Open Market Committee meeting in two-plus weeks?)

For the first time in the last 13 years, new home prices marked a quarterly decline during the third quarter. In news that is sure to raise more concerns over the troubling housing market, a new government report showed that new home prices dipped by 0.4 percent between July and September.

While prices fell in the quarter, they were still slightly higher from the third quarter last year. When compared to the same period last year, prices were only 1.8 percent higher. This is the smallest one-year increase since 1995.

The report stated that there are still some pockets of the country that are seeing robust price appreciation, but the price weakening is now being experienced in a "significant portion of the country," with prices dropping in 20 states.

Existing home sales continued their downward spiral for the eighth consecutive month in October, the AP reported today based on a report from the National Association of Realtors. The 5.1% drop in the median price of a home sold compared to the same time a year ago is the biggest year-over-year price decline on record, according to the AP.

Of course, analysts blame this housing slump on the serious credit crunch, but we all know the housing bubble that burst has a lot to do with it too. Housing was in a bubble and as with all bubbles, prices went up much further than they realistically should have in many areas of the country. People who bought homes at the peak of the bubble are the hardest hit right now because their mortgages probably already are upside down (they owe more than the home is worth) if they bought in one of the hard-hit areas -- California, Florida, Michigan and Nevada. Analysts don't think this housing price drop is over. I've seen predictions of a drop of 10% to 30% in the next five years in some areas of the country. The hardest-hit areas already have seen a 30% drop or worse.

While I keep hearing people talk about subprime borrowers who default on their loans as idiots who should never have bought a home in the first place because they couldn't afford the payments, the reality of the situation is that everyone is being hurt by the subprime mortgage mess, and even prime mortgages are now seeing strain. If something isn't done to make it possible for people to save their homes from foreclosure, prices will only drop even more dramatically as more and more foreclosure homes are sold are fire-sale prices.