The National Association of Realtors is on the side of Realtors, which is stating the obvious, so it tends to interpret housing data in a favorable light. For example, the NAR found in its survey of 150 metropolitan statistical areas that 35 of those areas had higher median existing single-family home prices than a year earlier. That sounds a bit better than what's been reported elsewhere in recent months.

But that's not to say the NAR won't report bad news; it will. The NAR also said that the median existing single-family home price fell 7.6% nationally in the second quarter. It blamed foreclosures and short sales -- which accounted for a third of transactions -- with pulling prices down.

It was also reported that the rate of decline is ebbing, but not from the NAR. While national price declines continue, nominal price drops have stabilized, according to housing price data released by First American CoreLogic. In fact, 883 of CoreLogic's core-based statistical areas registered no price change between June and July, according to Housingwire.com.

Good news could also be found in the consumer price index, which, at first glance, doesn't seem so good. Consumer prices rose 0.8% in July, which means the CPI is climbing at a 5.6% annual rate. The good news is that rate is unlikely to be sustained. Crude oil prices, a huge factor in rising prices, started to slide in early July, but gasoline prices didn't begin to decline until two weeks later. The big drop in energy prices in August means we should expect a significant drop in the rate of price increases in coming months.

Mortgage markets appear to agree with this assessment, for they hardly budged last week. According to Bankrate.com's weekly survey, the prime 30-year fixed-rate mortgage remained unchanged at 6.74%, while the prime 15-year fixed-rate mortgage fell 1 basis point to 6.26%. 

For most of 2008, we've been walking into a hurricane-force wind. Recent economic data suggests that the wind, if not yet at our backs, is abating: oil prices continue to drop and are now below $112/barrel. Gold prices have tumbled below $800/ounce. The dollar continues to strengthen against the world's major currencies. Factory output is gaining steam. Major banks are easily raising capital to replace what was depleted during the subprime fiasco.

When the data points are aggregated, they suggest an improved business outlook – lower inflation, more activity – for the second half of 2008. The mortgage industry should benefit as much as any industry. Banks and other lending institutions are finally getting their houses in order, which means their ability and willingness to accept more risk will increase. An increased risk appetite means more money will be allocated to mortgage financing, which, in turn, will mean more funding options for consumers