Cutts said the Freddie Mac economic team will be "watching carefully" the next two sales reports to "to see whether the July drop was the start of a new trend down or the result of a temporary pull-forward."

Yun pointed out that historically low interest rates have created a housing affordability situation akin to a box of tinder awaiting an economic spark. Job growth can set off the fire.

But if recent data on unemployment and underemployment are any indication, that may take awhile. After all, if the trends in home sales and prices have shown anything, it's that taxpayer funding can provide a temporary burst of energy, but can't sustain sales or price recovery. Between the initial "Making Home Affordable" surge and the most recent one, home prices declined nearly 7% and sales fell nearly 18%.

--Written by Lauren Tara LaCapra in New York.

>To contact the writer of this article, click here: Lauren Tara LaCapra.

>To follow the writer on Twitter, go to http://twitter.com/laurenlacapra.

>To submit a news tip, send an email to: tips@thestreet.com.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

Bank of America Inks Whopping $10.3 Billion Mortgage Settlement (Update 2)

Citigroup: Financial Winner

Treasury Finally Gives Up Fannie, Freddie Dividend Charade

New Rules Target House Flipping (Update 1)

Fannie Freddie Reform? Keep Dreaming