Housing Bottom: Are we there yet?

generic real estate housing mortgage home hosuing prices CBS/iStockphoto

(MoneyWatch) "The housing sector remains depressed," according to the Federal Reserve. This statement might elicit a "no kidding" response, but is the moribund housing sector finally ready to bottom out, and start the long slog back to normal? This week, data on housing starts and permits, new and existing home sales and homebuilder confidence may provide insight. And given the importance of the housing sector to the economy, market moves may reflect any surprises in those numbers.

Housing was the epicenter of the last decade's boom and bust. House prices doubled between 2000 and 2006, fueled by an abundance of easy credit sloshing around the globe. Since the bubble burst, the S&P/Case-Shiller National U.S. Home Price Index tanked 33.8 percent from the peak, recorded in Q2 of 2006. The housing depression has wiped out more than $7 trillion in homeowners' equity, has led to 5 million foreclosures or short sales and, according to CoreLogic, has given rise to 11.1 million households owing more on the their mortgages than their properties are worth (negative equity).

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Here's the good news: the foreclosure pipeline and the shadow inventory of homes may have peaked. Yes, the $25 billion mortgage settlement will bring more properties to market, but as the excess inventory gets burned off, the housing market may finally approach a bottom, which would be a welcome relief for the economy as a whole. The cover story of Saturday's Barron's makes the case that housing has bottomed, although blogger Barry Ritholtz is skeptical.

Speaking of the economy, the slightly better-than-expected data last week (retail sales, manufacturing, weekly claims) and the stress test results for the nation's largest banks, led to a solid week of gains for stocks. US stock indexes all closed above key psychological thresholds: Dow 13,000, S&P 500 1400 and NASDAQ 3,000.

-- DJIA: 13,232, up 2.4% on week, up 8.3% on year (best weekly gain of the year)

-- S&P 500: 1404, up 2.4%, up 11.6% on year (up 4.58% over the last five weeks)

-- NASDAQ: 3055, up 2.2%, up 17.2% on year (up 5.2% over the last five weeks)

-- May Crude Oil: $107.58, up 0.001% on week

-- April Gold: $1655.80, down 3.2% on the week

-- AAA National Average Price for Gallon of Regular Gas: $3.83 (up from $3.52 a month ago, gas prices up approximately 18% in 2012)

FACTOIDS OF THE WEEK, Stress Test Edition: It's been four years since the Bear Stearns canary in a coal mine moment of failure. From March 16, 2008 to Friday's close, here's how some of the largest bank stocks have fared, according to the New York Times Dealbook:

-- PMorgan Chase: +22.3%

-- Wells Fargo: +19.8%

-- Goldman Sachs: -21.5%

-- Morgan Stanley -50.7%

-- Bank of America -74.1%

-- Citigroup -81.7%

THE WEEK AHEAD:

Mon 3/19:

1:00 NAHB Housing Market Index

Tues 3/20:

Greece due to repay 14.5 euros of debt

8:30 Housing Starts and Building Permits

Weds 3/21:

7:00 Weekly mortgage applications

10:00 Existing Home Sales

Thurs 3/22:

Fed releases stress tests on big banks

8:30 Weekly jobless claims

10:00 Leading Economic Indicators

10:00 FHFA Home Price Index

Fri 3/23:

10:00 New Home Sales

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    Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

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