This just might be the turn in the numbers we've been waiting for: Resales of existing houses jumped by 3.1 percent in last month to the highest level in nearly half a year.

On top of that -- and to the near total surprise of Wall Street analysts -- new home sales also rose 2.4 percent, according to the Commerce Department.

Resales were up almost everywhere: Up 9.7 percent in the Western states, up 6 percent in the Northeast, one percent in the Midwest. Only the south saw a slight decline -- one half of one percent.

New home sales showed a similar pattern: Up an amazing 39 percent in the Northeast, 10 percent in the West, 8.2 percent in the Midwest and down by 2.5 percent in the South.

Most notable of all were the strong rebounds in sales in areas that had seen the biggest drops following the boom years -- especially in California and Florida.

Now, in fairness, before we get too enthusiastic about these sales gains, let's be frank about what's pushing this trend: The large numbers of short sales and foreclosures in many once-booming markets are cutting prices to the bone.

But rock bottom prices are also bringing in a flood of first time buyers, fence-sitters and investors who've been waiting for hard, statistical evidence that the cycle is flattening out.

Well, it looks like that hard evidence has finally arrived.

Sales in places like Riverside-San Bernadino, California, and Fort Myers, Florida -- once the West and East Coast symbols of boom and bust -- are now seeing strong growth in sales, according to the National Association of Realtors.

Keep this in mind too: The July resale numbers represent transactions closed before the passage of the new $7,500 federal tax credit. When the impact of the credit begins kicking in during the coming several months, you can bank on even higher sales numbers ... and a turnaround in prices.

In other key economic developments this week: Mortgage applications rose nationally for both conventional and FHA loans to buy houses. Interest rates dropped for the third straight week -- hitting an average 6.44 percent for 30 year fixed rate loans and 5.94 percent for 15 years.

Also the federal government's monthly survey of home prices in more than three hundred markets around the country found that although the national average of prices was down slightly, prices rose in 20 states … and are up year to year in 30 of the 50 states.

Published: September 2, 2008

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.