With sharp drops in sales of existing and new homes plastered over the front pages and leading the nightly newscasts, it's no wonder the real estate doomsayers on Wall Street have been working overtime.
And there's no minimizing the bad numbers we've been seeing: A surprising 27 percent decline in resales from June to July, and a 12 percent drop in sales of newly-built houses during the same period.
Yes, most economists predicted that the months following the tax credits' expiration would be negative, so we were forewarned.
But let's not get caught in a Chicken Little economic trap here. Hidden among the recent negative numbers have been some positives that aren't getting much attention.
Start with home values. If families are going to buy houses, they've got to have confidence that the property will at least maintain market value and ideally gain a little over time.
Well, every major index put out recently by government agencies and private researchers has found home prices stable or appreciating in most areas of the country.
The Federal Housing Finance Agency's index, released last week, found home values up by about one percent during the second quarter of this year over the first quarter.
The National Association of Realtors' sales report for July found median prices up by seven tenths of one percent on average from the prior month – not a big deal for sure, but on the plus side, not negative.
Affordability is another key area where things have been slowly improving with little attention. The Wells Fargo-National Association of Home Builders "housing opportunity index" — which looks at home prices, mortgage rates and what median-income families can afford to buy — is at a near record high point.
Thanks to 30-year mortgage rates in the mid-four percent range, 72 .3 percent of median-income American families can now afford to buy the median-priced house. Historically that number has stayed in the low 60 percent range, and sometimes slipped below 50 percent.
That's great, you might say, but those families have not been buying lately even though they can afford to. Why?
Every consumer poll has the same conclusion: People are worried about unemployment — potentially their own.
But now there might just be some modest good news just around the corner on jobs. Last week's new filings for unemployment benefits dropped by 6 percent – far beyond what most economists predicted and the first decline in weeks.
Bottom line: Don't be rattled by the rough patch of bad housing news we've been seeing. The fundamentals are in place for improvement once the economy begins generating new jobs again.