Trend No. 1 for inspiring optimism in the real estate sector? Higher home prices.

March, April, and May showed solid increases in median existing single-family home prices compared to the same months last year. Three months of gains might not sound all that impressive, but consider this: The last time there were three consecutive monthly gains in home prices was back in 2006, before the housing market plummeted.

While higher prices aren't good news if you're buying a new home, they present good news for the economy. Rising prices mean increasing demand.

Trend No. 2: is the encouraging increase in housing permits for new home construction. The bottom appears to be behind us and housing permits are clearly trending upward over the past year and a half, according to the chart from the Census Bureau.

The third trend, which isn't getting much attention, is that the gap between authorizations for new house permits and actual completions is shrinking. According to the U.S. Census Bureau, the average time between permit authorization and actual completion of a new house is around eight months.  The likelihood that permits turn into real houses is increasing, that bodes well for housing-related sales.

(Source: the Daily Finance)