How do you interpret a mixed bag of numbers? That's the big question for housing right now.

On the one hand, you can focus on the latest home resale and pricing numbers just released by the National Association of Realtors and say: "We've got some big problems here!"

The national median house price dropped by 13.8 percent in the last 12 months. Only 18 or 152 major markets surveyed saw price increases.

That sounds ominous.

On the other hand, you've got to take notice of the fact that a record high percentage of total sales in former boom markets have been "distressed" -- either foreclosures or short sales.

Distressed sales are pulling down the median price numbers at the national level -- even though non-distressed, arms-length sales in the majority of markets have experienced only small to moderate declines in prices.

As Lawrence Yun, the chief economist for the National Association of Realtors puts it, the real estate market today is "bifurcated," with fire-sale low prices in foreclosure transactions that are co-existing with much higher, more normal prices in the same metropolitan area for non-distressed properties.

Also, there's an important flip side to low median prices: Sales are booming in many markets where prices have fallen most sharply. Check out these numbers: Sales in the first quarter jumped by an amazing 117 percent in Nevada, 81 percent in California, 50 percent in Arizona and 25 percent in Florida compared with year-earlier levels.

Those high sales rates are also burning off unsold inventories and cutting total listings in some markets. In a survey of 29 major metropolitan markets, Zip Realty found total listings declined by 3.6 percent in April compared with March.

Meanwhile low-cost mortgage money continues to provide the jet fuel propelling higher sales. The Mortgage Bankers Association's latest monthly survey found that new loan applications increased a little last week - about half a percentage point over the week before -- and rates fell again after two straight weeks of increases.

Average thirty year fixed mortgage rates now are around four and three quarters percent, and fifteen year fixed rates are about four and a half percent - both are just above all time lows.

Qualifying for a mortgage can still be a challenge, since Fannie Mae, Freddie Mac and major lenders continue to look for large downpayments -- other than for FHA loans -- and higher FICO credit scores than they did during the boom years.

So yes absolutely, it' s a mixed bag, but the overall direction is positive, even on tougher mortgage standards.

Published: May 19, 2009

Use of this article without permission is a violation of federal copyright laws.

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.