Checking the health of the housing recovery

Waiting for the pain in residential real estate to end? BusinessWeek asked experts what to watch now.

There are yet more signs that the crippled U.S. housing sector is getting back on its feet. On Nov. 23 news arrived that U.S. existing home sales jumped 10.1% in October. Homes were bought and sold at the rate of 6.1 million per year—much better than the 4.5 million rate in the beginning of the year. More data are expected in coming days on home prices and new-home sales.

"We've seen some more encouraging data [on] the housing picture, but we're not out of the woods," says Michael Sheldon, chief market strategist at RDM Financial Group. The challenges remaining for residential real estate include the many foreclosed homes moving onto the market, a large inventory of unsold homes, questions surrounding the federal government's efforts to stimulate housing sales, and broader economic weakness that saps Americans' ability to buy.