NEW YORK ( TheStreet) -- One development in recent economic data that should be getting more attention from investors is a series of signs that the U.S. housing market may have reached a bottom and is beginning a long-awaited recovery. It's a story that's easy to overlook, in part because it's hardly spectacular in comparison with Europe's debt crisis, weak employment data and an upcoming U.S. presidential election. The S&P/Case-Shiller 20-city home price index came in essentially flat for March on a seasonally adjusted basis, marking the end of a long string of declines. That came after the National Association of Realtors said last week that sales of previously owned homes increased 3.4% in April from a month earlier.
If the housing market has begun a recovery, today's stock prices are a long-term bargain.
Housing remains deeply depressed, but the data are fueling hope that the current mix of low home prices and record-low mortgage rates is luring buyers for this spring selling season. Housing starts and building permits have shown recent increases, and shares of some homebuilders have bucked the market's sell-off. Shares of Toll Brothers ( TOL) are up more than 10% since the beginning of March, while the S&P 500 is down by more than 5% over the same period. Shares of Lennar ( LEN) are up 9%; shares of D.R. Horton ( DHI) are up 7%. "There's a lot of widespread evidence out there that we've reached the floor for the housing market in terms of sales and price," said Paul Ashworth, U.S. economist with Capital Economics, an independent macroeconomic research consultancy.