A Capital Economist analyst wrote, “A double-dip in both housing activity and prices is underway. Prices are likely to fall for the next 12 months, while activity will remain weak for at least three years.” And that’s enough to instill fear in most (if not all) Americans. This is probably why a foreclosure moratorium is feared to spur that said double-dip – which is why the recent development on foreclosure freezing may be seen as a positive thing by real estate insiders.

Three weeks ago, Bank of America implemented a stoppage of foreclosure proceedings in 23 states; shortly after, it announced that the delay is being expanded to include all 50 states. This week, though, the biggest mortgage lender in the country is lifting the freeze in the 23 states where foreclosure activity undergoes judicial review. Bank of America says the reason behind this is that there was no evidence found regarding unwarranted foreclosures.

The partial lifting is earlier than what analysts predicted, but this bodes well for industry insiders. With the current statistics on the housing market, which is seen as the main anchor for lifting the economy from recession, analysts’ fear just might have basis.

July of this year marked a 15-year low in total home sales with a 34% drop. Even mortgage applications for home purchases are hovering close to the 14-year low – which is surprising, given that mortgage interest rates are at its lowest in years. If the foreclosure delays are prolonged, the numbers for both home sales and mortgages might dip further.

“The inevitable result of a prolonged period of weak demand and high supply will be lower prices. Prices have already started to fall back and will probably continue to decline for at least the next 12 months,” says analyst Paul Dales.

Dales further predicts that supply will stay higher than the demand for the next few years. Relative to demand, supply will be 1.5 million homes too many. Even starts will remain low.

The economy will need more time to recover, with real estate insiders noting that it will only be growing by 2% in the next few years. Whether lifting foreclosure suspension is going to help pull up the growth rate will remain to be seen.