No. Prices are still falling as indicated by the recent release of the December Case-Shiller Price Index. Despite the new 8,000 home purchasing tax credit and the incredibly low mortgage rates housing prices will continue to fall as there is still a huge overhang in vacant housing units in combination with major job losses. In most markets nominal prices will not bottom until at least early 2010.
In the Washington, DC metro area the majority of the nominal price declines have already occurred. Most areas will see small further price declines ( 5 - 10%). Nominal prices are likely to bottom in late 2009 or early 2010.
No. The United States already spends too large a share of GDP on housing. The tax credit will temporarily increase this amount. In addition this adds more debt to the deteriorating federal balance sheet.