Economists differ on housing recovery

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Opinions differ as to when the housing market will turn around. Most analysts think that we have not yet hit bottom. Some think we might be close. One of the keys to the puzzle is the state of the housing inventory. In May, there was a 10.8-month supply of homes for sale at the current sales pace, according to the National Association of Realtors (NAR). This was a move down from an 11.2-month supply in April. When the supply reaches the six- to seven-month level, the housing market should pick up, barring a major recession or a big jump in inflation or interest rates. Lawrence Yun, NAR's chief economist, thinks that pent-up demand will help fuel a recovery in the housing market. According to Yun, the current volume of home sales is at the same level it was a decade ago. But the population has grown by 25 million people since then, and there are 10 million more jobs. He believes that the housing market in many areas will stabilize by year end. Less optimistic economists see an...