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We've been hearing so much about economic uncertainty - the European financial crisis, slow job growth. But here is some better news. The U.S. housing market is finally showing more signs of recovery. That's the word from a report on the state of the nation's housing market, that will be released later this morning by Harvard University.

NPR's Chris Arnold reports from Boston.

CHRIS ARNOLD, BYLINE: Harvard comes out with this study once a year and this time around, it's painting a much brighter picture. Eric Belsky is the managing director of the Harvard Joint Center for Housing Studies. He says a few years ago, in order to get people to buy houses, the government had to entice them with that big, home-buyer tax credit.

ERIC BELSKY: When you think about what life was like, jobs were being lost at the rate of 700,000 per month;, the stock market was still falling; and yet people came out of their bunkers to buy homes because they thought it was a good deal, to be able to get cash from the federal government.

ARNOLD: These days, the economy is gaining at least some jobs every month. Home prices in many areas have stopped falling. In some places, they've started to rise. And so more Americans are deciding - all on their own - that it's actually a good time to buy.

BELSKY: We're seeing existing home sales have been up for 10 months in a row. We've seen prices bottom out. All of this suggests that housing is beginning to turn a page. And the only thing that would make the page turn back again is if the broader economy goes off the rails.

ARNOLD: But so far, Belsky says that people are slowly getting more confident.

BELSKY: Think about how careful people are moving back into the market, when prices have fallen this much. You know, the opportunity to - potentially buying at or near a bottom of a cycle, is great. And I think people are beginning to appreciate that.

ARNOLD: Prices, by one measure, are down 35 percent nationally. Interest rates are at record lows. Meanwhile, the cost of renting a house or apartment has been rising. So when you put all that together, and you compare the cost of owning versus the cost of renting...

BELSKY: It hasn't looked this good in - you know, 40, 50 years.

ARNOLD: Recent surveys show that despite the housing crash, the vast majority of Americans still aspire to own a home - if they don't own one already. But of course, many people right now don't have the resources. Unemployment is still up above 8 percent. Millions more Americans are underemployed. Chris Herbert is a Harvard research director who worked on the housing report.

CHRIS HERBERT: We have this tantalizing statistic out there, about how affordable homeownership is. But you still have to have, you know, sufficient income, sufficient credit, sufficient savings.

ARNOLD: And many in the industry feel that after all the crazy lending during the housing bubble, access to credit now has gotten too tight. David Stevens is the president of the Mortgage Bankers Association. He'll be speaking later today at a press conference, when the Harvard study is officially released.

DAVID STEVENS: I am extremely concerned today about an overcorrection in the credit markets - the avoidance of risk by the lenders across the country that we depend on, to extend credit to American families.

ARNOLD: Stevens represents those lenders, but he's still concerned that they're being too cautious. And that that could mean that this slow and painful trudge out of recession will be longer and more painful than it needs to be.

STEVENS: We shouldn't create a blockade that eliminates well-qualified families who want to own a home to raise their family, from gaining access to homeownership. And I think that's the tipping point that we're facing right now.

ARNOLD: Stevens says with new regulations still taking shape in Washington, banks face a lot of uncertainty about what will happen if a loan they make today goes bad, say, five years down the road. That's what's making them so cautious. So he's hoping regulators come up with smart and clear rules that will encourage lending.

Chris Arnold, NPR News, Boston.

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