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If only all the confidence swirling around the stock market today could find its way to potential home buyers across the nation; unfortunately it will take more than a little Greek bounce to right what's wrong in housing.

Contracts to buy existing homes fell in September, according to a new report from the National Association of Realtors, and the culprit is confidence. More Americans are staying where they are more than ever before, and even Baby Boomers, once expected to fuel an active adult market, are stagnant.

What's weighing on confidence are still-falling home prices, and what's pushing those home prices down are foreclosures. That's why the Obama Administration is pushing a potential plant to auction off foreclosed properties in bulk to investors, specifically the quarter of a million properties currently on the books of Fannie Mae, Freddie Mac and the FHA. As demand for single family rental properties rises, so too do potential investor returns.

"There is a hope that we'll be able to do a pilot in the near future, perhaps by the end of 2011 or early 2012. However, there hasn't been any decision on timing yet," according to an administration source.

The hope is there, and apparently the cash is there as well.

"Many investors are out there raising billions of dollars to buy these properties," says Jaret Seiberg of MF Global. "It's a great idea, and it's one of the few things that we've heard in several years now that could really help housing in a meaningful way."

Seiberg likens it to the Resolution Trust Corporation, which liquidated assets (primarily real estate assets) during the Savings and Loan crisis in the 1980's.

"The idea is not just to reduce supply but to reduce the fear that there's going to be this massive flood of foreclosed homes into many markets, and it's that fear of this foreclosure inventory that's really keeping prices down," adds Seiberg.

There were takers back then, and will likely be many takers now.

"The beginning of the rentership society is upon us," say analysts at Morgan Stanley. "Singe family rental total returns offer lower volatility and outsized returns vs. other major asset classes, even when accounting for the housing bubble and subsequent declines."

Investors would need some incentives, however, like perhaps a tax break or low-interest-rate loans. Currently Fannie Mae caps the number of loans it makes to investors in single family properties at 10. Any program would of course have to go through Fannie and Freddie's regulator, the Federal Housing Finance Agency (FHFA), which is still, shall we say, mulling:

"Before moving forward with individual asset sales, we're working hard to ensure that we have engaged appropriate private sector financial expertise. For any given locality, market conditions may dictate one or another type of transaction," says an FHFA spokesperson.

Well I guess that's a start.

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