America’s housing market soared to record heights in recent years on easy credit and innovative financing. Now those forces are unwinding in ways that could exert a slowing influence on the housing market through this year and 2008. A key symptom of the challenge ahead: Foreclosure rates are rising not just for risky subprime borrowers but for a range of adjustable-rate loans made in recent years.

Some 1.1 million homeowners who took out adjustable-rate loans between 2004 and 2006 will probably face foreclosure, according to a new forecast by First American CoreLogic, which tracks national housing markets. That number would surge to 1.9 million, the firm estimates, if home prices fall by 10 percent from where they began the year. In total, there are about 76 million owner-occupied housing units in America.

Inventories of previously owned homes have also been edging up, according to numbers released last Friday by the National Association of Realtors. Sales volume rose in February, but the unsold inventory climbed a bit faster, to a 6.7-month’s supply. The challenge of loan defaults appears small relative to the overall market in which some 7 million homes can change hands in a year. But in any market, changes at the margins often play an important role.

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