Real estate data can be very misleading! When you hear that house prices are up or down, what is that compared to? Is it compared to last month, six months ago, a year ago, two years ago, when the market was at it's peak! The same is true with housing starts figures, home sales, etc.
The best way to analyze the situation is, if you had the money, would you buy something, sell something, hold on, or panic? That is the same strategy that any financial planner would tell you to follow regarding any investment. And for most people, their home is their single biggest investments.
House prices rose for so long that at some point there was going to be a pricing correction. There are so many factors that affect the housing market - - - some are real, some psychological or emotional - - - but all have tremendous impacts on the housing market. Just as the stock market has come back significantly from it's low, but is still far from the high, the housing market will slowly rebound also. Just as with stocks, a home buyer should not try to guess when the actual bottom will be reached. Most analysts believe we are very near that point, if we haven't already reached it. Therefore, it is probably a good time to take advantage of this potentially historic buying opportunity.