Despite the sluggish growth in the economy overall, CoreLogic chief economist Mark Fleming says the recovery in the housing sector is not sluggish and that the recovery is more durable than in previous years, in CoreLogic's latest MarketPulse Report.

Home prices as of August were up 4.6% from a year ago, according to CoreLogic's home price index.  Fleming points out that prices were up in all but six states, indicating that the recovery is broad based.

Demand is higher than a year ago, according to Fleming, as evidenced by increased sales: new home sales are up 24% from a year ago, and existing home sales are up 11% over the same period.  Demand is slowly increasing, according to Fleming.  Meanwhile, supply as measured by actual inventory is "constrained" in many markets.  Nationally, there is a 6.4 month supply of homes on the market at the current rate of sales.

There have been some spikes in sales since the crash, particularly a couple of false starts that coincided with the expiration of two homebuyer tax credits, but the current increase in demand does not appear to be tied to any particular policy designed to prop up or stimulate the housing market.

Holding back the market is the fact that 45% of homeowners with mortgages are "under-equitied", according to Fleming.  These homeowners either have no equity at all because their mortgage balance is more than their home is worth, or they do not have enough equity to sell and then make a traditional 20% down payment on another comparable house. 

Fleming cautions that in the past three years, gains in house prices in the spring and summer have eroded in the fall and winter, so there is some concern that the measures of the recovery could weaken in the coming months. 

Still, Fleming sees positives in the economy overall that can enable the recovery to continue.  Consumer sentiment has been strong.  And while GDP growth was anemic in the last quarter reported, some of that was due to drought conditions which are considered to be temporary.