Almost no one in the economic forecasting business wants to take the risk of announcin that it's now official. We're past the rock bottom of the down cycle for real estate and now we're moving into recovery mode.

That's understandable, but the fact is that the signs are all there. Sales and pending sales of homes have turned up sharply in hard-hit markets. House prices are more affordable. Consumer confidence polls show slight but noteworthy improvements in the public's outlook.

Check out last week's developments alone:

Mortgage applications for purchases of resale and new homes were up again -- eight percent for applications using conventional loans, and a remarkable 17 percent gain in applications to buy houses using low-downpayment FHA mortgages.

Mortgage rates remain at near historic lows, though they may be bottoming out. Thirty-year fixed rates rose a tenth of a percent on average last week, according to the Mortgage Bankers Association, to 4.7 percent. Fifteen year rates stayed flat, around four and a half percent.

A group of new consumer-sentiment polls came out showing that Americans are feeling better about their economic prospects for the first time in months. A survey of 15,000 adults by Discover Financial Services recorded a significant jump in confidence between February and March. A New York Times/CBS poll of 1,000 consumers found the same. The Times even put the results at the top its front page with the headline: "Poll finds Brightening Outlook on U.S. Economy."

Members of the National Association of Home Builders reported that shoppers' visits to look at new houses for sale are "on the rise and consumer interest is increasing.” The association also announced that more than half of all U.S. households -- 55 million of them -- can now afford to buy the median priced $200,000 new home. That's up 45 percent in the past 24 months.

Even Business Week, which has been particularly harsh on housing in recent years, ran a cover story about the turnaround getting underway -- focusing on hard-hit areas of Florida, California and Las Vegas, where sales have been rising fast and unsold inventory taking a plunge.

The report quoted Paula Hellenbrand, president of the Cape Coral Florida Association of Realtors, who predicted an end to inventory problems on the near horizon.

"At this rate (of current sales),” she told the magazine, "we're going to see a big shortage of inventory by summer, and that will trigger price increases.”

That would be extraordinary, especially in view of still-rising unemployment and depressed levels of spending by consumers. But don't count it out.

Published: April 14, 2009

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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, consumer 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.