Home Prices Stop Falling, But Why?

New Case-Shiller data has the decline in housing prices coming to an end:

Which naturally raises the question: Why? Prices aren’t back down to their baseline level. Felix Salmon says “If housing kept track with CPI inflation, the Case-Shiller index would be at 125 now; in fact, it’s at 140.” What’s more, there’s still lots of unsold inventory. Common sense says prices need to keep falling until all the recently-built, currently-vacant houses can be sold off.