The Mortgage Banker's Association is predicting slower, but still very strong home sales through 2007. Existing home sales should be up 2 percent this year, while falling 3 percent next year and 2 percent the following year. Even though overall sales are dropping, historically, even a 3 percent drop is still very good. New home sales are expected to drop one percentage point further than existing home sales in '06 and '07.

Overall, the MBA sees 30-year fixed mortgage rates topping 5.7% this year, 6.2% in 2006 and 6.3% in 2007. Originally, the MBA forecasted rates above 7.0% by 2007, and that reevaluation lower resulted in stronger real estate sales through the next two years.

Many real estate bubble advocates still support the idea that current housing prices are wildly over-inflated and that the high use of Interest-only ARMS will ultimately pop the bubble. In particular, either a significant drop in employment, or a rapid rise in mortgage rates, these real estate critics argue, could cause significant depreciation in many real estate markets. (More from CNNMoney)

Of course many of these bubble-believers have been making their 'pop' forecast for the last couple of years and continue to argue that it still might be a couple more years before their predictions materialize.