It'd be a mistake to give too much weight to a single week's statistics that point to a turnaround taking shape in the housing market. But this week's and this past month's numbers have been exceptionally promising.

You can't just ignore them.

Start with housing sales. Resales of existing homes jumped by 5.5 percent last week -- that was the largest monthly increase since July of 2003, in the middle of the housing boom. In the western states, sales were up a record 34.4 percent!

Now, it's true that a lot of these sales are foreclosures and pre-foreclosure transactions, and they carry low prices. But that's precisely how turnarounds develop coming off of down cycles -- you've to sop up the houses that were unaffordable to their buyers, were way overpriced and went belly up.

Sales of newly constructed homes also were higher in the latest month, according to the Census Bureau -- up by 2.7 percent on average nationwide, but by an impressive 22.7 percent in the West.

Still another positive: More evidence that the bulging unsold inventories of new and existing houses in many parts of the country are now falling. A quarterly survey by the Wall Street Journal released last week found inventories down in a majority of the 18 markets studied.

In Sacramento, California, the inventory dropped by 32.1 percent during the past three months. In Orange County, California, inventory was down 21.6 percent, 21.5 percent in Boston, 21.1 percent in Denver, and nearly 21 percent in San Diego.

Across the country, the backlog of unsold but listed houses dropped 1.2 percent to a 9.4 month supply last month, according to the National Association of Realtors -- that was down from an 11 month supply the previous month.

On top of all this, we saw new mortgage applications take another big jump this past week, with 30-year fixed interest dropping to 6.26 percent and 15-year rates to 6.1 percent. Applications to purchase homes using conventional loans were up by 7.9 percent during the week, according to the Mortgage Bankers Association. New purchase applications using FHA insurance jumped by 10.1 percent.

As we said, one week of good news does not mean we're officially in turnaround mode, and certainly the softness in the overall economy isn't helping.

But you've got to start connecting the dots. Week after week, month after month, housing and real estate numbers are starting to look better and better.

Published: November 4, 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.