Freddie Mac’s top economist said Thursday that he doesn’t expect to see housing rebound from its current downtrend until 2010, according to a report published by McClatchy newspapers. Speaking at the National Economists Club, Frank Nothaft, chief economist at the GSE, offered a bearish take on the current state of housing in most markets nationwide. From the story:

“I don’t think we’re going to see any improvement in the national house-price matrix until 2010,” said Nothaft, a respected government economist who’s followed the national housing market for more than two decades. He projected a 16 percent drop in mortgage originations this year, for new home loans and refinancing. He expects foreclosures, which rose by about 1.5 million in 2007, to increase even more this year If there was any good news in the stark snapshot of the housing crisis, it came from a bit of really bad news. The Freddie Mac economist thinks that new single-family home starts this year will be the lowest in 50 years, back when Dwight D. Eisenhower was president.

That bad-is-good thing, of course, comes from the fact that most economists believe that new housing starts need to fall that far in order to clear a massive inventory overhang. And it should be noted that Nothaft was referring to a recovery in prices moreso than discussing sale volume trends.

Nonetheless, the remarks represent the most bearish take yet by anyone at either Fannie Mae or Freddie Mac. Nothaft said there was a 50 percent chance of a recession in 2008, although he also noted we “may be in a recession already.” Part of the current problem in mortgages, he suggested, lies with the fact that subprime and Alt-A share of total originations quadrupled between 2001 and 2006. In 2001, subprime was just 5.4 percent of $2.2 trillion in loan originated that year — by 2006, that percent had grown to more than 20 percent of the entire market. Likewise, Alt-A saw its share rise from 2.7 percent to 13.4 percent within the same time frame. (H/T, Calculated Risk)