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Existing home sales in April were close to expectations, but as this chart shows, the pace of sales has been improving: Sales are up 14% since last July.

It's also nice to see that prices are bottoming/improving as well. This chart shows the median price of existing single family homes, adjusted for inflation. Over the past year, real prices have jumped about 8%. The chart also suggests that real home prices have found support at levels that have prevailed over long periods. In short, the housing bubble has burst and prices have finally returned to sensible levels. The repricing of the U.S. housing stock has allowed the market to clear; we've seen the worst, and now things are beginning to improve on the margin.

But not only have prices become reasonable from an historical perspective, the cost of purchasing a home relative to median family incomes has now fallen to record-low levels, as shown in the chart above of housing affordability.

The evidence is becoming very strong that at the very least we have seen a bottom in the residential housing market.

Source: More Signs Of A Housing Upturn