There may be reason to hope that the housing market is starting to show signs of life again. Two recent housing reports have indicated that things are looking up.

First, an article on the USAToday website reported that although demand for almost all consumer and business loans declined in the latest quarter, the Federal Reserve says that demand grew for prime mortgages, or good credit mortgages, marking the first increase since the first part of 2007. We can certainly attribute a great deal of that heightened demand to rock bottom interest rates.

Interestingly, the increase in demand for prime loans came during the same time that roughly 50 percent of banks were tightening their lending standards on those types of mortgages, and 65 percent were toughening up the requirements for non-traditional loans.

Not all parts of that report were entirely hope-inspiring though. The Fed survey found that more than 70 percent of all banks expect to see a decline in the quality of their portfolios. Still, we can take the points of light where we can get them these days.

The second report comes from the National Association of Realtors. Its Pending Home Sales Index showed that pending sales of existing homes climbed upward in March, making two consecutive months of increases.  The NAR said that signed contracts rose 3.2 percent in the latest period largely due to a flood of first-time homebuyers taking advantage of excellent mortgage interest rates.

While the association warns that it may still take several months before sales get real momentum, NAR President Charles McMillan tried to put things in perspective.

“Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”

So if you fit into that segment of society that has good credit, lots of money in the bank for a down payment, and a stable, steady job – now is the time to act! For the rest of us, the waiting game continues…

The National Association of Realtors announced last Thursday that sales of existing homes across the country sank by 3.0 percent during March, but the group still managed to find a silver lining to the downward movement. As much as I want to see a housing recovery, I’m not sure that their hopes are well founded.

According to the NAR, existing home sales fell in March to a seasonally adjusted annual rate of 4.57 million, a 3 percent decline from the previous month and a 7.1 percent drop from March 2008. The national median home price for existing homes-single family, condos, townhomes and co-ops- decreased 12.4 percent in the past year to its present $175,200. But the price was up 4.2 percent from February

Yet as the NAR sees a much larger percentage of business coming from first-time home buyers, they have hope that recent tax credit extensions and rock-bottom interest rates will keep things moving.

One the NAR website, President Charles McMillan said:

“The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs.”

The NAR’s chief economist Lawrence Yun had this to say:

“The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey. Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

“Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” he added. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

As has been discussed before, those low interest rates are not available to everyone, and certainly not to all prospective first-time buyers. Whether or not the NAR sees the kind of summer uptick it is hoping for may depend more on credit standards and the availablility of mortgage credit for all buyers.