Housing is no longer collapsing

I read the headline today ("U.S. home resales tumble") and thought, oh boy, this doesn't sound very good. Then I checked the data and updated my chart, above. Well, things are not collapsing at all. Home resales have been essentially flat for the past 13 months! That's excellent news, I think, because it means we are finding a bottom in the housing market. The other part of the headline said that prices fell the "most on record." Whoa, that sounds grim, but it's actually great news. The faster we get prices down to a level that clears the market, the better. Construction has been falling for the past three years. The median sales price of existing homes has fallen over 20% from its peak, and is back to the levels of March '04. Prices will undoubtedly have to decline some more, but most of the pain of falling prices is now behind us. The housing market is fixing itself, and the bottom is getting ever closer.