A year ago, it was news whenever an economist predicted impending doom for the nation's housing and credit markets; this year, it's news when an economist suggests that housing may be finding at least some of its footing. Earlier this week, Wells Fargo & Co. (WFC) senior economist Scott Anderson went out on a ledge of sorts and suggested that early signs may be pointing to "the first baby steps toward a housing market recovery." To be clear, Anderson wasn't advocating a near-term recovery for the nation's housing; instead, he pointed to recent economic data as evidence that things aren't getting any worse than they already are, which is better than we've been able to say for most of this year. "We have been reading negative headlines about the housing market, foreclosures and credit losses surrounding high risk mortgages for so long now that it’s easy to convince one’s self that housing will never stabilize and will just keep on pounding the economy and the consumer forever," he said. Anderson said he was "noticing a few rays of sunshine in an otherwise dire landscape" as of late -- he singled out residential construction as one key indicator suggesting that housing's drag on GDP growth might be moderating -- but cautioned that we're not out of the woods yet, either. He said a likely rate raising campaign by the Federal Reserve would be likely to push mortgage rates north of 7 percent for the first time since April 2002; higher mortgage rates would likely push mortgage demand even lower, he said. He also worried that a growing number of underwater borrowers owing more against their home that it's worth will exacerbate any remaining problems in housing. "By the spring of 2009, it is estimated that more than 15 million households, or 10 percent of all households, will have zero or negative equity in their home," he said. "In the Western United States that figure could approach one in four households." And, of course, there's that wild card of a recession that really has yet to be dealt yet, Anderson said. "A steep or prolonged economic recession with rising unemployment could push even more households over the financial edge, leaving homebuilders and potential home sellers struggling to find buyers and forcing another wave of price declines and lackluster demand," he said. "I'll continue to keep my fingers crossed." Disclosure: The author held no positions in WFC when this story was published; other indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.