More and more signs point to a new start. Just like we do not know we have been in a recession until after the fact, we also do not know we are out until after the fact.

Bernanke  to a Joint Economic Committee, U.S. Congress in Washington, D.C.:

Federal Reserve Board Chairman Ben Bernanke offered his view that the economy may be bottoming out and is likely to turn upward later this year. With signs that suggest some tentative signs that final demand, especially demand by households, may be stabilizing. Consumer spending  grew in the first quarter. In coming months, households’ spending power will be boosted by the fiscal stimulus program, and we have seen some improvement in consumer sentiment.

The housing market, has shown some signs of bottoming. Sales of existing homes have been fairly stable since late last year, and sales of new homes have firmed a bit recently. The increased affordability of homes appears to be contributing more broadly to the steadying in the demand for housing. In particular, the average interest rate on conforming 30-year fixed-rate mortgages has dropped almost 1-3/4 percentage points since August, to about 4.8%. With sales of new homes up a bit and starts of single-family homes little changed from January through March, builders are seeing the backlog of unsold new homes decline-a precondition for any recovery in homebuilding.

The housing market is beginning to stabilize and that the sharp inventory liquidation that has been in progress will slow over the next few quarters.

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