After four months of gains in existing home sales, July saw a dip of 2.7 percent in home resales, a slight speed bump for the recovering housing market.

While today's news does cast a small shadow on the hopes of a housing rebound, there are still plenty of reasons to think that the housing market has bottomed out.

U.S. existing home sales rose 7.2% in July to a seasonally-adjusted annual rate to 5.24 million units, the National Association of Realtors announced Friday. It was the fourth straight monthly rise.

However, the best news in the data was not so much the sales uptrend, as it was the apparent bottoming of the price downtrend: at minimum, the rate of decline is abating. Don't misunderstand: prices are still lower, on a year-over-year basis, but there are signs of stabilization.

Toll Brothers (NYSE: TOL - option chain) stock is falling today after the National Association of Realtors announced existing home sales fell 5.3 percent in January to a seasonally-adjusted annual rate of 4.49 million, the lowest level in 12 years. Analysts had expected a slight uptick in existing home sales. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TOL.

This morning, TOL opened at $16.87. So far today the stock has hit a low of $16.12 and a high of $16.98. As of 11:50, TOL is trading at $16.57, down 48 cents(-2.8%). The chart for TOL looks bullish and S&P gives TOL a positive 4 STARS (out of 5) buy ranking.

Just call the December 2008 existing home sales data an upside / downside report: On the upside, sales rose 6.5% to a seasonally-adjusted annualized rate of 4.74 million units, the National Association of Realtors announced Monday. On the downside, the median sales priced plunged a record 15.3% compared to a year ago to $175,400.

Economists surveyed by Bloomberg News had expected December 2008 existing home sales to total a 4.4-million-unit annualized rate.

Further, for all of 2008, median prices declined 9.3% to their lowest level since 2004. Also in 2008, existing home sales totaled 4.91 million units, a 13.1% drop from 5.65 million units sold in 2007. The 4.91 million 2008 total is also the lowest since 4.37 million units were sold in 1997.

One unqualified bright spot: home inventories, which declined 11.7% to 3.68 million units, or about a 9.3-month supply at current sales rates, down from an 11.2-month supply in November 2008.

Housing Sector / Economic Analysis: The recession -- and the financial crisis, for that matter -- began in housing; perhaps the recovery will begin there, as well. Prices continue to decline, but the decrease in existing home inventories is a positive: if inventories continue to decline in the coming months, that could signal better days ahead in construction. Inventories of both existing and new homes must decline further before home builders can consider increasing construction. Stay tuned.

Minyanville contributor Andrew Jeffery dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.

Put on those rose-colored glasses, it's time again for the Existing Home Sales data:

• September sales came in 5.5% higher than the previous month, at 5.18 million (annualized) compared to estimates of 4.95 million.
• Sales were 1.4% higher than last year -- the first year-over-year increase in three years.
• Inventory shrank to 9.9 months worth, from 10.6 months.
• Median home price dropped to $191,400, the lowest since April 2004.
• Distressed sales made up 35-40% of sales, with 80% of those going to owner-occupiers (higher than the usual 75%).

Per normal, the National Association of Realtors chief economist Lawrence Yun is as optimistic as ever. He gets paid to obfuscate the truth.

Per normal, the National Association of Homebuilders chief economist David Seiders is as pessimistic as ever. The worse it is, the better chance his group gets on the government dole.

It's messy out there in housing land, but that's not exactly news. Keep in mind that the year-over-year numbers line up against this time last year, when credit markets first seized up and home buying all but evaporated for a couple months. Easy comparisons make for premature bottom call.

In the current housing market, it has been hard to find any sort of silver lining, but we do see a little positive news today, as existing home sales in July jumped more than expected, mainly due to lower home prices.

During July, sales of existing homes rose by 3.1%. This was well above the 1.6% that Wall Street was hoping to see, but analysts caution against assuming that this is a sign that the market has finally bottomed out. Despite beating Wall Street estimates, we still have to consider the fact that home sales were over 13% lower than the same period a year ago.

While we can view the July sales figures as promising, we must also take a minute to look at home inventories, and here the picture is not so rosy. Here we see that the number of unsold single family homes is running at all time highs. Currently the market is trying to deal with a total of 4.67 million unsold homes. This is the highest level that we have seen since 1968 when the National Association of Realtors started monitoring the data.

Sales of existing homes in June fell 2.6%, to a seasonally-adjusted annualized rate of 4.99 million - - the lowest level in 10 years - - the National Association of Realtors announced Thursday.

Economists surveyed by Bloomberg News had expected June existing home sales to total a 4.94 million annualized rate. The annualized rate totaled 4.99 million units in May; a year ago, in June 2007, it was 5.75 million units.

Meanwhile, the national, median, existing home price for all housing types was $215,100 in June, down 6.1% from a year ago when the median was $229,000.

Existing home sales varied by region. Sales rose 1% in West, but fell 6.6% in the Northeast, 3.4% in Midwest, and 3.1% in the South.

'Bad time to be a home seller'

Economist Peter Dawson said the June existing home sales statistic shows that the housing market remains a buyer's market.

"No question, it's a bad time to be a home seller. Existing home prices continue to slide in most markets, and there's little in the data to suggest a turnaround, given the U.S. economy's doldrums," Dawson said. "My advise for those who are in the market to buy and don't have to buy a house right now - - wait it out, quarter by quarter. Prices in your market could drop considerably."

The nearly always-on-the-mark Bloomberg News columnist Caroline Baum reminds investors/traders -- and potential home buyers -- that one should not jump into summer by jumping into a home purchase (if you can avoid it).

Baum notes that one has to view April's 6.3% increase in existing home sales in the proper context: housing has been down so much and for so long that every incremental pop up looks like a housing sector recovery. It isn't.

New and existing home sales peaked in July 2005 and September 2005, respectively, but housing starts didn't until January 2006. The result? A massive inventory build.

A record housing recession

Single-family starts are down 63% from their January 2006 peak, easily 'topping' peak-to-trough declines of 38% in 1973-75, and 57% in 1984-1991, and approaching the 65% slide in the housing recession of 1977-1981, Baum says.

Sales of existing homes in fell 1.0% in March 2008, the National Association of Realtors announced Wednesday, as the prospect of continued home price declines discouraged potential buyers.

The NAR's existing home sales index declined to 83.0 in March 2008. The index totaled a revised 83.8 in February 2008, and stood at 103.9 in March 2007.

Economists surveyed by Bloomberg News had expected the March 2008 existing home sales index to drop to 83.8%.

Regional conditions vary

Conditions varied by region. In the Midwest, the index fell 10.4% in March 2008 to 74.1; in the West, the index fell 1.4% to 91.2, and in the South, it fell 0.1% to 84.9. In the Northeast, the index rose 12.5% to 80.8%.

Sales of existing homes fell slightly in March 2008, the National Association of Realtors announced Tuesday, as resales continued to lag amid the nation's worst housing slump in more than 15 years. It was the fourth existing home sales decline in the last five months.

Sales advanced at a 4.93-million-unit annualized pace in March 2008, the NAR said. Economists surveyed by Bloomberg News had expected March 2008 existing home sales to register a 4.95-million-unit annualized rate. The February 2008 existing homes sales statistic was revised to a 5.03-million-unit annualized pace.

Regionally, March 2008 existing home sales fell 6.5% in the Midwest, 3.5% in the South, and 2.2% in the West. Sales roses 2.2% in the Northeast.

Meanwhile, the U.S. median home price plummeted 7.7% to $200,700 on a year-over-year basis. The median price was $217,400 a year ago.

Sales of existing homes declined 1.9% in February 2008, the National Association of Realtors announced Tuesday. It was the third existing home sales decline in the last four months.

Economists surveyed by Bloomberg News had expected February 2008 existing home sales to decline 1.0%. The January 2008 existing homes sales statistic was revised higher to an increase of 0.3%.

Regionally, February 2008 existing home sales fell 9.8% in the West, 5.5% in the South, and 3.7% in the Midwest. Sales rose 3.2% in the Northeast.

Meanwhile, the aggregate U.S. existing-home price will probably decline by 1.4% to a median of $215,800 for all of 2008 before rising 3.7% to $223,800 next year, the NAR said.

The existing home sales statistic is considered a lead economic indicator because the metric tracks actual signings for the month reported, in this case, February 2008.

Economic Analysis: A sub-par February 2008 existing home sales statistic, but one not entirely inconsistent with the consensus estimate. Existing home sales remain generally weak, which is typical for an economy in recession and a housing market where potential buyers expect future price declines, and hence postpone home purchase decisions.

Existing home sales rose 2.9% in February 2008 to a seasonally-adjusted annual rate of 5.03 million units, the National Association of Realtors announced Monday. Economists surveyed by Bloomberg News had expected February 2008 existing home sales to total a 4.85 million unit annualized rate.

Sales are down 23.8% compared to a year ago. Meanwhile, inventories fell 3% to 4.03 million units, which represents a 9.6-month supply at the current sales pace.

The median sales price also plummeted by 8.2% compared to a year ago, to $195,900. February 2008 sales by region were as follows: Northeast, up 11.3%; Midwest, up 2.5%, South, up 2.1%, and the South, down 1.1%.

February 2008 sales of single-family homes rose 2.8%, while condo sales rose 3.7%.

Housing Sector Analysis: For a change, a good monthly existing home sales report. Sales did not rise dramatically, but the important point is that unit sales did not decline substantially in February 2008 either, and it's likely lower home sale prices are beginning to stimulate modest demand. Still, a word of caution to potential home buyers in the United States: median home sales prices are likely to continue to decline through at least Q3 2008. One month's rise in existing home sales is not nearly enough to suggest a trend, and inventories are likely to continue to rise given current foreclosure trends, and due to the approaching spring/summer period when many families planning to move list homes for sale.

Sales of existing homes and condominiums in January 2008 totaled a seasonally-adjusted annual rate of 4.89 million units, the National Association of Realtors announced Monday. The January statistic was roughly in-line with the 4.84 million consensus estimate.

The January 2008 stat was also 0.4% lower than the revised 4.91-million-unit December 2006 annualized rate, and was also the lowest sales pace since the NAR started tracking combined sales in 1999.

Further, on a year-over-year basis, resales plunged 23.4% compared to January 2007.

Housing's doldrums continue

Economist Steve Affinito said the song remains the same regarding the U.S. housing sector.

Several major pieces of economic news were released this morning, and all were good. Personal Spending rose more than expected, the fastest growth in two years. The Chicago PMI report rose more than expected as well. The Michigan Consumer Sentiment report seemed to hold its own. In addition, the core inflation number came in within the Fed's target range.

This is a major contrast to the numbers earlier in the week. Durable Goods and Consumer Confidence reports were terrible, and both Existing and New Home Sales indicated that there appears to be no end in sight for the housing slump. The only good number was Second-Quarter GDP. However, this was prior to the turmoil created in the markets by the credit crisis.

Then, why did the stock market rally on the bad news and is going down today on these positive economic reports? It's the liquidity. The stock market is driven by money and credit. As there is greater availability and lower cost, the market performs better. Who is the ultimate gatekeeper for this? You guessed it: the Federal Reserve.

Existing home sales took a dip again last month, the fifth straight month in a row, and are now running at a five-year low. It wasn't as big of a drop as many analysts had been expecting, but we did see a 0.2 percent decline, taking the annual rate of 5.75 million units.

Along with a drop in existing home sales came another drop in home prices. With the decline in prices last month, we have now seen existing home prices fall for twelve straight months in a row. The average last month dropped down to $230,200, an 0.6% drop from the same month last year.

Not all areas of the country went through further deterioration though. When the nation first started to undergo a housing slump, the effects were initially noticed in the East, now this area has been steadily improving. Last month the region saw not only rising existing home sales, but also an increase in home prices.