The current outlook for the housing market is less than robust, with housing indicators expected to decline this year. Based on projections from Fannie Mae, Freddie Mac and the Mortgage Bankers Association, for instance, housing starts are expected to drop 6.3% to 1.92 million from last year. Meanwhile, existing home sales are projected to decline 6.2% to 6.60 million with new home sales slightly lower at -4.9%, dropping to 1.21 million.

While lower, these numbers would still roughly be the third highest on record. Contributing to the limited slowing in the housing market are positive housing fundamentals such as strong demographic trends - in part from minority and immigrant households - and the economy. Merrill Lynch analysts cite as positive factors modest supply and the expanding universe of affordable mortgage products, allowing consumers to afford more expensive homes.

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