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OVERVIEW ~ April 19 through April 23, 2010 ~ The Dow Jones Industrial Average (DJIA) rose each day, usually in 0.1% increments, which took the index from 11018.66 at the beginning of Monday’s trading day to 11204.28 at the end of Friday’s. The 10-year Treasury note, meanwhile, shuffled in place, ending the week at 3.813%, only 1.2 basis points below its yield at the end of Monday. The Freddie Mac (FHLMC) average 30-year fixed-rate stayed at 5% for the week. And the real estate sector provided several examples of good news.

FOCUS ~ The Mortgage Applications Survey, assembled by the Mortgage Bankers Association (and detailed to the right), finally showed the kind of strength many analysts have been anticipating. For the week ending April 16, the overall index (including refinancing mortgage applications) climbed by 13.6%, with the applications for purchase money mortgages rising by 10%, and the refinancing index, inspired by slightly lower interest rates, increasing by 15.8%. However, the good news was received by many analysts with some skepticism. They attributed the higher numbers mainly to the end of the federal $8,000 and $6,500 tax credit program for homebuyers.

Based on higher mortgage application numbers, in any case, we can reasonably expect more completed sales in the near term. Meantime, the existing home sales index showed an increase of 6.8% in March over February’s sales. (Remember that this index tallies completed sales, and thus tells us very little about the future.)

Even more sales were computed in the new-home sales index, which rose by 26.9% in March over February’s sales volume. (This index, though, is based on a rather thin reading of builder sales, and is often revised in future months.) We end up with a portrait of what may possibly be an improving real estate market. But we need longer-term indicators if we are to gain a better sense of where the real estate market may be heading.

There are, thankfully, a few significant long-term indicators: According to the Wall Street Journal, finished lot prices are up about 20% nationally from the beginning of 2010, with prices rising by more than 60% in Phoenix and Southern California’s Inland Empire, for example, and by nearly 40% in Los Angeles in the same time period. Builders are buying up most of these lots and thus are betting on real estate’s future at this point. And investors are betting on the builders, with the Dow Jones U.S. Home Construction index, a measure of rising and falling builder stocks, up almost 30% this year. These are significant investments in real estate’s growth over the longer term.