The Federal Reserve's board of governors gave their current economic forecast a label last week: The label is "modest" - and it's an important word to keep it in mind.

Yes, we're still in recovery mode, the Fed governors said, but it's a slow slog, and on any given day the news can sound discouraging.

Yes, the gross domestic product, or GDP, is still growing, and many corporations are sitting on big wads of cash, which is good.

But those same companies are not yet confident enough in the pace of the economic recovery to start hiring again … and that's not good.

It all adds up, according to the Fed, to a mixed picture of where we are on the long pathway out of the Great Recession.

Given this tepid assessment by the government's top economists, it's useful to note that the real estate market racked up positive numbers in three quarterly sales and price reports issued last week.

Start with the National Association of Realtors' second quarter results. Compared with the second quarter of 2009, this year's numbers show how far housing has improved year-over year.

In two thirds of the major local markets tracked by the Realtors -- that's 100 out of 155 areas around the country -- median prices were higher at the end of the second quarter (June 30th) than they were the same time the year before.

Nationwide the median price of houses was up by one and a half percent. But 14 local markets saw double digit increases, including San Bernadino and San Jose, California and Akron, Ohio.

Home sales were up 17 percent during the second quarter compared with 2009, and overall sales were higher in 47 states plus the District of Columbia.

Two other housing indexes released last week told similar stories: Zillow's survey found prices up significantly in a number of large California markets, including San Diego, San Francisco and Los Angeles, all of whom had 6 percent or higher gains.

Prices were up elsewhere as well - Boston by 3.4 percent, Oklahoma City 4 percent, Boulder, Colorado 2 percent.

The "IAS 360" price index released last week focused on quarterly gains rather than annual. From the first quarter of 2010 through the second quarter, average prices rose by 1.1 percent according to IAS, not a big deal, but forward movement nonetheless.

Meanwhile, new applications for mortgages to purchase homes rose again for the fourth straight week in the Mortgage Bankers Association survey, indicating that despite all the stock market jitters and worries about employment, many consumers are still eager to take advantage of record low 30-year home loan rates.

Published: August 16, 2010

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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.