Real Estate

See a list of selected cities where housing prices are forecast to decline.The study comes on the heels of a survey from the U.S. Census Bureau showing that 35% of American homeowners with mortgages last year spent 30% or more of their household income on housing costs, including loan payments, real-estate taxes, insurance and utilities. In 2003, a similar survey found that 30% of such homeowners were spending that much on housing. The new survey illustrates the strain on household budgets that has already helped slow house-price increases in some areas and push them modestly lower in others.

The proliferation of headlines about a weakening housing market is encouraging some potential buyers to hold off until prices look like they're near a bottom.

Buyers and sellers can use forecasts from Economy.com and others for guidance as they try to figure out how to play this tricky market. But because the reports don't agree on which markets will be the weakest or how severe the slump will be, they could also be left scratching their heads.

While various studies generally agree that some of the biggest risks of declines are in California and Florida, there are striking differences, reflecting different forecasting methods. For instance, a recent "risk index" study published by PMI Mortgage Insurance Co. ranks the Boston metro area as the seventh-riskiest in the nation in terms of the likelihood of price declines over the next two years. But Economy.com says that home prices in Boston likely bottomed out in this year's third quarter after a modest 2.2% decline.

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