The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- After a disappointing 9.1% unemployment rate was reported earlier this month by the Bureau of Labor Statistics, it's no wonder housing prices dropped in the S&P /Case-Shiller 20-city composite indices released last week of first quarter home sales. But will the housing market rebound in the near future? "Housing price indices nationwide are hitting new lows, driven by sales of distressed homes, which comprise 28% of all sales according to RealtyTrac," says Wharton Real Estate professor Susan Wachter. "There is some price firming in non-distressed sales, but with foreclosures feeding shadow supply inventory, a solid bottom is not in sight."
Unfortunately, the unknown factor can't be reduced until housing prices rise, creating as Wachter puts it, a "chicken and egg dilemma." She says, "Once prices firm, the spigot of new foreclosures will close and the market will have visibility to estimate absorption of current inventory and shadow from the REO (Real Estate Owned) process." However, there are economic predictors that will spur housing market recovery. As job growth occurs, and potential home buyers feel more employment stability, purchases will increase. The trend will continue as inventory shrinks and housing prices are driven up. But without a drop in unemployment, don't look for that scenario. Housing price indices could continue to fall without better news from the Bureau of Labor Statistics.