Since a rebound in housing prices is the absolute key to warding off a complete financial disaster, we spend our days tracking the data in an attempt to assure we know what’s going on.
Unfortunately, the mainstream press is always and forever filled with the pronouncements of the NAR, despite the fact that this conflict-of-interest source was proven to have provided disastrously misleading information during the bubble run-up. On that basis I would have expected the NAR pronouncements to come with some sort of a warning label affixed but apparently that lesson went unlearnt.
At any rate, one of the key statistics that the NAR has been offering, and which the press has been only too happy to repeat, concerns falling inventory.
Total housing inventory at the end of June [2009] fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.
“This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year,” Yun said.
(source)
Yippee! Sounds like everything is on the mend!
Calculated Risk has a very good description of both why inventory is important and why the NAR pronouncements are flawed:
Inventory is usually the best metric to follow for the housing market – and according to
by cmartenson 
