In another sign of a housing recovery, the National Association of Realtors reported today that "U.S. home resales surged in January to a 1-1/2 year high and the supply of properties on the market was the lowest in almost seven years."

The chart above shows the "months supply of homes" at the current sales rate, which fell to 6.1 months in January, the lowest level since April of 2006.  With the inventory of homes for sale falling back to historically normal levels, it's another sign that the real estate market is stabilizing, and it's only a matter for time before we see home prices trending upward.