The real estate market is certainly trying to find footing. The economic data seems to point to a market headed in every direction. This is all part of the recovery process. Starting with this article, I’m publishing a weekly housing market digest. The main focus will be a short summary of the economic data that will impact the housing market and ultimately your real estate investment strategy. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Let’s start with: Corelogic Home Price Index Shows Home Prices Rising The CoreLogic Home Price Index showed both a year-over-year (YOY) increase in home prices and a month-over-month increase in April. April 2010 showed a 2.6% increase over April 2009 (by many considered to be the bottom). March’s number was a YOY increase of 2.3%, and when distressed sales are removed, the index was up 2.2% over March’s 1% YOY increase. Within the index the states showing the highest appreciation were Hawaii (+10.6%), California (+8.4%) (recovery in process!), North Dakota (+6.0%), New York (+3.7%), and Virginia (+3.6%). This is excluding distressed sales. And the bottom? The biggest decliners were most of the usual suspects Nevada (-5.6%), Michigan (-4.1%), Arizona (-3.4%), Florida (-3.4%), and Washington (-3.1%). Opinion: Price increases are likely impacted due to stimulus in some markets, but there are clear signs of recovery happening. Apartment Rents bottoming It’s official, the rental market might be bottoming, at least for now. The Consumer Price Index showed rents unchanged in May and Axiometrics recently said that apartment rents are up 2.8% nationwide as reported in the Wall Street Journal. And even those of you in Phoenix or investing there are due for some good news. An article in the Arizona Republic reported positive news for landlords and future rents. It looks like the market is finding a bottom with regard to rents. And this should come as a relief for landlords who’ve seen rents readjusting as leases have been coming due. Opinion: Rents bottoming out is a lagging indicator, but how long will the bottom last, years? Builder Confidence in Sharp Decline Builders immediately became less confident as the home-buyer tax credit expired shown by the sharp drop in the Housing Market Index on June 15th. The Housing Market Index (HMI) dropped to 17, a level not seen since February. This is a sharp decline over May’s revised 22 and much lower than the June 2005 high of 72. Builders are worried about getting financing, and competition from distresses sales. It’s unlikely we’re going to see strong increases over the next few months until favorable employment reports start coming in and inventories decline. Opinion: Builders are pessimistic, but it should help supply concerns. Housing Starts Dip in May Housing starts saw a month-over-month (MOM) drop of 10% from April to May falling to a seasonally-adjusted annual rate (SAAR) of 593,000 units. The good news is the YOY number showed housing starts up 7.8% from May 2009. Single-family homes lead the drop with a decline of 17.2%. This should be good for landlords and people using a buy-and-hold strategy. Opinion: The dip is good for supply contraction, but bad for builders. The 7.8% increase over last year shows a much improved environment for builders licking their wounds. Mortgage Purchase Applications Improve After 6 weeks of decline, mortgage purchase applications are on the rise, improving 7.3% from last week, according to the most recent survey by the Mortgage Bankers Association. The refinance index rose 21.1% signaling there are some people who’ve been holding out for lower rates before refinancing. Also important as more people refinance, they should be able to reduce payments giving them an opportunity to put more dollars back into the economy. This is another chapter in a market searching for a clear direction. It seemed last week we’d continue on a post-tax-credit downward trend. Now that the credit has expired, I think a better indicator will be a month from now when some of the see-sawing of this index is over. Opinion: Good for future home sales, consumers reducing debt service (money to spend!). Overall this week we saw a definite pull back in anything related to construction and a (potentially false) rise in home prices. The news in the housing markets seems to be related to the hangover from the home-buyer credit party. There is certainly a visible improvement over 2009, but the question remains if the non-distressed inventory absorption is enough to eclipse the distressed shadow inventory coming. I’m still sticking to another 5-6% decline in home prices over the next 6 months nationwide. However it is clear a real recovery is occurring, especially in tight rental markets.