The housing market continues to bounce around at what many experts believe is the bottom. In recent weeks I have written about how many of the housing reports have indicated a slowly strengthening real estate market. I don’t believe that trend is changing however in the last week we have seen the New Home Sales report as well as the Pending Home Sales report come in weaker than expected. With the employment picture steadily improving, it is a little bit confusing as to why the housing market is unable to gain much traction towards improvement.

On the bright side of housing, the Case-Shiller Home Value Index reported that home values in the 20 major cities they measure, have remained stable. Month after month we have been seeing continuing declines in values and this latest report provides some comfort that the downward trend has either stopped, or at least taken a breather.

The Mortgage Bankers Association reported this week that purchase applications increased 3.3% where as refinance applications declined 4.6%. As I have been reporting, real estate agents across the U.S. have been seeing increased traffic of buyers coming through their offices. In addition, many more homes are coming on the market from independent sellers. The interesting observation is that these new sellers are not in financial distress.

Mortgage rates have reversed direction and have been declining over the last week. Very few experts feel that rates will drop back to their record lows. The reverse in direction has many mortgage and real estate professionals breathing a sigh of relief. No one ever knows how the home buying public will react to an increase in mortgage rates.

First Time Jobless Claims continue to drop along with continuing claims. Next week there are two significant employment reports. On Wednesday ADP will release their payroll report and on Friday the government releases their National Employment Report. It is a little too early to hear much in the way of predictions about these reports. The few analysts that have spoken, seem to believe that the employment rate will remain virtually unchanged.

According to this week’s GDP report, the economy continues to grow at a modestly strong pace. A growing concern exists about what is going to happen to growth in the near future. More and more in the news lately we are hearing about the apparent economic slowdowns taking place in China and Europe. What has many investors spooked and sitting on the sidelines is that we don’t know how these slowdowns will impact the U.S. recovery.