Existing home sales plummeted 30% in July after the homebuyer tax credit brought forward 300,000 to 600,000 of housing demand, assuming 4 million homes sell annually, according to research today from Barclays Capital. "Most of these sales would have otherwise occurred through this summer and some over the coming winter," said the note from analysts Sandeep Bordia, Sandipan Deb and Jasraj Vaidya, who predict several quarters of bad housing news, with home prices likely to fall nationally by another 7%. The MacroMarkets index from yesterday is also assuming house price declines for the remainder of the year, with cumulative negative activity likely until 2012 and beyond. "While the risk of a more severe drop in prices has increased with the recent data, we still assign a low probability to a 15-20% decline from here," they write. "Housing is close to a bottom based on equilibrium measures, and in our view, the administration is likely to take steps to prevent a collapse in the housing sector should things worsen." The analysts remain bullish on the non-agency sector in the medium term and recommend taking profits on jumbo hybrid WAC pass-through trade. Subprime floaters remain out of favor due to the low yields. They are also bearish on option-ARM super seniors, even though there are "higher yields along the forwards," it does not look positive from an overall risk/reward standpoint, "at least for now," they say. Write to Jacob Gaffney.