Encouraging numbers on the real estate front, including new housing construction and sales of existing homes, continue to point toward a sustained recovery in the months ahead.

Home builders -- who had been the most depressed segment of the real estate industry for the past two years -- are pulling permits again and starting to put up new houses.

The Commerce Department reports that single family starts last month were up nearly two percent over the prior month, while permits for future construction jumped by six percent.

Starts and permits are now at their highest levels in ten months.

Meanwhile, existing home sales and price reports from around the country show the breadth of the rebound getting underway:

In five large southern California counties that were near the epicenter of the bust, houses sold in July at the fastest pace in three years, according to MDA DataQuick researchers.

The five counties are San Diego, Orange, Los Angeles, Ventura and Riverside-San Bernadino. Sales there have risen for thirteen consecutive months compared with the previous year's levels. Even median prices are showing modest increases, as foreclosures decline as a percentage of total sales.

But John Walsh, president of DataQuick, cautions against overstating the positive news here though. Walsh believes that "we could bounce along" at this summer's slightly improved levels "for quite awhile" if California's economy doesn't improve.

In another tough market, Sarasota-Bradenton on Florida's west coast, second quarter home prices were ten percent higher than the first quarter, according to the Florida Association of Realtors. Sales were up 20 percent in the same period.

In Davenport, Iowa, median prices were up an impressive 31 percent in the second quarter compared with the year before, and in Cumberland Maryland, they were up 22 percent.

Some lenders are beginning to take note of the improving numbers and are revising their controversial "declining area" designations that restrict mortgage lending or make it more costly for buyers.

SunTrust Bank, a large national lender, has just taken most of California off its "declining markets" list, leaving only a handful of scattered markets still on it.

Mortgage money got a little less costly last week as well, and that's got to help first-time and move-up buyers. The Mortgage Bankers Association reported that loan applications to purchase houses jumped four percent; that's the third straight week of higher applications.

Rates dropped about a fifth of a percent, pushing average 30 year fixed rates to 5.2 percent and 15 year rates to just 4.5 percent.

Whatever your take on the overall economy, you've got to admit: It's looking pretty good out there for housing.

Published: August 25, 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.