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Personal finance predictions for 2010: Housing's modest comeback

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Will 2010 be the year that home prices level out?

There are encouraging signs from the credit recording company TransUnion, which forecasts relief on the housing front following three straight years of increases in mortgage delinquencies.

TransUnion predicts that the portion of U.S. homeowners who are two or more months late with their mortgage rates will drop about 3 percent, which will result in a similar sized drop in mortgage payments for someone who refinances.

That's expected to halt the bleeding that began back in 2006, when mortgage delinquencies rose 50 percent per year from 1.94 percent.

Fitch Ratings was less optimistic in its 2010 predictions. Due to the flat residential mortgage-backed securities (RMBS) market, Fitch says housing prices could continue to drop by 10 percent in the coming year as temporary government assistance programs like the Home Affordable Modification Program struggle to keep up with rising delinquencies.

"Negative equity, high re-default rates on modified loans and additional rises in unemployment may deter any positive momentum for RMBS," says Fitch senior director Grant Bailey.

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