As real estate recovers from the financial crisis and one of the worst market disasters in history, home buyers’ confidence is still in the slumps. Despite government’s efforts to nurture the real estate market, most home buyers are playing it safe. Fancy antics won’t mask the fact that the future is still uncertain. Consumers are tending to be more cautious now, a trend that will most likely continue until there is a definite improvement in the economy. Unemployment rates are still near the 10% mark, which directly influences the housing market.

According to regional reports, October 2010 home sales were some of the worst in the last 20 years. For example, Minneapolis’s’s sales were down 41%, Seattle’s sales were down 32%, and California also hit a record low. These numbers are not simply reflective of an off-season dip; consumers are playing it safe and waiting for signs of a lasting recovery.

But sales aren’t the only thing down, so is the foreclosure rate due to government sponsored programs designed to assist upside down homeowners. However, it is unclear how this trend will affect the housing market. Unlike the foreclosure arena, where the government is lending its weight, it is doing less in the real estate market. Its home-buyer tax credit has expired and is unlikely to be renewed. Without this carrot, purchasing a new home is looking less enticing.

To make matters worse, interest rates are inching up. In November 2010, a 30-year mortgage loan interest rate hit a low of 4.17%. This record rate hasn’t been around since the early 1970’s. However, just a few weeks later, the interest rate rose to 4.40%. This climbing trend influences the 15-year mortgage loan interest rate which is rising as well. Bankers are predicting that the low interest rates enjoyed throughout much of 2010 won’t last. Invariably, they are going to keep rising.

With these factors at play, buyers are less likely to take a risk previously considered safe: investing in a home.