"Home Prices Are About to Bottom" was the headline for the Barron's cover story the week of July 14, 2008. The story explained that the housing market should level off in many areas of the country by the end of the year.

I have made some equally unfortunate prognostications in my tenure at BloggingStocks, so my purpose is not to poke fun at Barron's but to point out that here we are, over two years later, and it is still debatable whether the housing market has bottomed out.

Moody's reported that the rate of defaults on home mortgages has fallen to roughly 6.5% of all mortgages, and that the number will be slightly lower throughout 2010. They neglected to mention that the historical default rate is one-third that, or that the 2010 default rate on mortgages will be 300% higher than the historical rate.

Housing sales in 2010 will be worse than expected, and home prices will continue to fall as more and more foreclosed homes enter the market. There are currently more than 800,000 foreclosed houses that the banks have yet to put on the market, and another 1.5 million homes are expected to go into foreclosure in the next 18 months.

After four months of gains in existing home sales, July saw a dip of 2.7 percent in home resales, a slight speed bump for the recovering housing market.

While today's news does cast a small shadow on the hopes of a housing rebound, there are still plenty of reasons to think that the housing market has bottomed out.