With talks of the housing market still now making a clear path to recovery, it is so easy to get caught up in all the predictions coming out these days. But just how important is it to let these predictions affect our perception of the housing market? Maybe not so much.

Just recently, Fannie Mae and Freddie Mac’s regulator published a forecast on how much the two government-sponsored enterprises will cost taxpayers until 2013. The forecast drew out three different scenarios based on whether home prices will remain stable, improve, or deteriorate. When news outlets caught wind of the forecast, they decided to go with the $363 billion cost as headline.

The Treasury Department is in sort of panic because of this, saying the numbers did not include the 10% dividends that both Freddie Mac and Fannie Mae are to give back to the government as part of the deal. The dividends, says Assistant Treasury Secretary for Financial Institutions Michael Barr, were placed to compensate taxpayers and ensure that they get paid back. He also says that, given that home prices are to stay the same, only $19 billion loss is expected – since nearly 90% of the losses have already occurred.

Barr, asked to comment on mortgage securitization, says he’s never been big on projections or predictions or even relying on any numbers – but he did say that evidence will show no structural flaw in the foreclosure process. Yes Clear Capital has put up an alarm: its monthly home price report – which clearly mirrors the more popular S&P/Case-Shiller Home Price Index – mark a sharp drop in prices over the past two months. The 5.9% drop may well be a hangover of the discontinuance of the tax credit but trend shows the worse is about to come.

Clear Capital’s Kevin Marshall says, “The reason this is so scary is that we have a very severe price decline in two months, added on top of the robosigning issue that has a lot of people scared, and going into the winter months, which is classically the slow time for real estate, and prices are generally stressed. Put those three things together for Q4 2010 and Q1 2011, and we are in for a rough ride.”

It certainly is a peculiar time for the housing market: the usual indicators are no longer able to accurately predict the market. Houses may be affordable, mortgage rates at an all-time low, and supply remains high but people are still not buying.

And this does not yet touch on the recent foreclosure scandal. The foreclosure freezing has resulted to a dip in consumer confidence. Even those who encouraged people that it’s high-time to purchase a home will now hesitate.

Now the housing market is not just riddled with a consumer problem but a consumer perception problem as well. With a bloated inventory and a low consumer confidence, it’s safe to say that the Fannie Mae and Freddie Mac predictions are way below the nation’s priorities. What everybody needs to focus on is how to avoid these predictions from coming true.