In spite of signs of a recovery, many home buyers are continuing to fall behind on their mortgages. Some economists see this as an indication that a second major wave of foreclosures is likely, even though the housing market appears to be stabilizing.

This next upsurge in foreclosures could cause more disruption and push prices down farther.

Housing experts say that the recent favorable housing data doesn't reflect the number of properties that banks have left in limbo - repossessed, but not yet on the market.

Lenders are deluged by late-stage delinquencies. The pent-up foreclosure inventory is there, says Massoud Ahmadi, director of research for the Maryland Department of Housing and Community Development.