The real estate market s recovery hasn t unfolded quite as neatly as the stock market s. The latest housing data suggest the market has begun to slow again. The annual rates of new and existing home sales fell in February, according to the National Association of Realtors and the Commerce Department. And the market is bracing for a January decline in the Case-Shiller home price index.

There are plenty of impediments to a strong housing recovery right now, including a weak labor market and mixed signals about the broader economic recovery. However, the most obvious hurdle and the one many analysts say must be jumped before home prices can fully recover is the mounting pile of U.S. home foreclosures.

The Obama administration took another stab at curbing foreclosures Friday when it announced measures to offer some jobless homeowners a three-month break on payments and give lenders more incentives to reduce the principal on delinquent loans.

Economists and academics say the changes to the administration s Home Affordable Modification Program are likely to prevent some foreclosures at least more so than the current iteration of HAMP has and most say they should have a positive effect on home prices if they are successful, but some say they are skeptical the impact will be felt throughout the market.

Anything that prevents foreclosures should help bolster house prices, says Morris Davis, an assistant professor of real estate at the University of Wisconsin s School of Business who studies foreclosure relief. However, he adds, we don t know what [the HAMP enhancement] means for the market.

Up until now, HAMP has primarily sought to help underwater borrowers those who owe more on their mortgages than their homes are currently worth avoid foreclosure by modifying mortgages. The program worked by reducing homeowners interest rates, but the vast majority of trial loan modifications haven t stuck. A year into the program, more than one million trial modifications had been made, but only 168,000 have been made permanent. And because servicers weren't required to cut borrowers' balances, many remained stuck with negative equity.

Lower payments are nice, but the degree to which people are upside down, it s a real motivating factor to walk away, says Mike Larson, a real estate analyst at Weiss Research. If they are not getting back to breakeven, why should they stick around?

The new program aims to solve that problem by offering financial incentives to lenders to cut the loan balances of distressed homeowners. It also targets unemployed workers, requiring servicers to provide at least three months, and up to six months, of temporary assistance for eligible borrowers. During that time, those borrowers payments will be reduced to no more than 31% of their monthly income.

Given that the main cause of distress for homeowners is a disruption of income, Davis says this new element of the program is going to help a lot of unemployed people avoid some painful choices. (Under the existing program, servicers had the option to grant forbearance to struggling homeowners, but for the most part they chose not to do it, Davis says.)

So what does this mean for home prices? It s unambiguous that if we stop foreclosures, we re more likely to help support house prices, or at least prevent them from falling, Davis says. It s the magnitude of that we don t know.

One place to start looking might be the regions hardest hit by both unemployment and slumping home values. The question is, how much is this policy change going to help people in California, Nevada, Florida, Michigan? Davis says.

Others are more skeptical. For any real broad shift to happen in home values, there needs to be a ramp-up in demand, says Paul Willen, an economist at the Federal Reserve Bank of Boston who has studied the foreclosure crisis. And despite the government s best efforts to spur demand (see the extended and expanded first-time home buyer s tax credit), it s not sufficient enough to boost house values. People aren t buying homes because they can t sell theirs, he says.