Sales of previously owned homes, one of the housing industry's more stable and generally stronger recent metrics, eased slightly in September, coming in at an estimated annual rate of 4.75 million homes. That projected sales pace was right in line with consensus figures, and just narrowly below the estimated annualized total of 4.83 million units sold in August. (Note that initally the August estimate had been reported at 4.82 million homes.)

The main reason given for the slight month-to-month dip, according to the National Association of Realtors, a leading trade group, was the thin supply of available properties. It should be noted that sales were still a formidable 11% above the prior-year estimated annual total of homes sold. 

The slight setback notwithstanding, the trade group's chief economist, Lawrence Yun indicated that 2012 would end up as the best year for resales in five years. He further intoned that "the housing market is recovering." Given the recent stellar numbers issued on housing starts and building permits for September, and the further pickup in builders' confidence reported earlier this week, there is little reason to argue with that upbeat assessment.

Additionally supporting the case for this sector's continuing overall recovery is the fact that the median price of a home sold last month was $183,900. That was 11.3% higher than the year-earlier median price of $165,300. It was also the biggest annual gain in percentage terms since November of 2005, when we were near the peak of the unsustainable housing up cycle.

Meanwhile, the current inventory of unsold homes stands at 2.32 million units, or just a 5.9-month supply at the current sales pace. This is the first time since early 2006 that the supply of unsold homes had fallen below six months--a level, which is considered by housing veterans to be a healthy supply of such properties.

All of this good news aside, we are still a long ways from being out of the woods on this front, as sales of existing homes and new properties, along with housing starts, building permits, and the price of a new and older home are all well below where they were five and six years ago. We have made excellent progress over the past year, to be sure, but there is plenty of room to improve. Hopefully, we will see that progress evolve over the coming several years.      

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.