Where are the economy and real estate headed in the coming months? Well, we've got some mixed signals this week, but the overall trend looks encouraging.

Probably the most upbeat crystal ball reading of all comes from the country's top group of forecasters, the National Association of Business Economists, which has a great track record in calling trends and market turns. After its latest survey of members released last week, the association said the following: "The good news is that the deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worrying about inflation."

The consensus forecast from the business economists is for the Gross Domestic Product, GDP, that's the main measure of the economy's output and activity -- to grow by 2.9 percent, and for new housing starts to jump by an impressive 38 percent.

That is good news because home resales tend to be closely tied in with GDP: If the overall economy is flush and growing, that supports higher home purchases and sales.

The big negative at the moment, of course, is jobs. We may be pulling out of recession, but we're not yet growing new jobs in large numbers. An unemployment rate stuck near 10 percent is a big factor holding back the pace of the housing recovery.

But, on the other hand, there are important bright spots in housing: For example, home prices continue to bounce back in major metropolitan markets, according to the latest data from the IAS 360 survey, which is based on information from 15,000 neighborhood areas.

In metropolitan Boston, prices rose 1.1 percent year over year in the latest study. New York metro prices were up 1.3 percent. Fairfield County, Connecticut, a New York bedroom suburb, saw prices up by 5.1 percent. Warren County, New Jersey, another New York suburb, was up 7.4 percent.

San Diego prices were also up for the year - by 1.3 percent.

Of course, some other large cities saw the opposite: Las Vegas lost another 2 percent for the 12 months, Los Angeles was down 1 percent and Miami - which is still struggling with unsold condos by the thousands, lost nearly 2 percent.

Without question, though, the biggest positive for housing right now continues to be the bargain-basement interest rates available for mortgage money. Fixed 30 year rates averaged 5 percent last week, and 15 year rates came in at 4.4 percent.

That's about as good as it gets.

Published: October 20, 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.