The U.S. housing recovery reached “two significant  milestones,” according to Capital Economics’ Ed Stansfield.First, both CoreLogic and Case Shiller showed a double digit increase in home prices in March.

Second, the number of homes listed for sale climbed to 6.3 million in  April.

“If we exclude November 2009, when homebuyer tax credits were distorting the  market, the 6m mark was last breached back in 2007,” writes Stansfield. The  reason the 6.3 million figure is significant is because it compares with  annualized home sales of 5.4 million.

What this basically means is that in the near-term, sheer momentum will help  boost home prices.  But prices should moderate this year because supply  exceeds sales. This latter point cools concerns about a new housing bubble:

“To put that into context, if the current  listings/sales differential was to be sustained, end-month inventory levels  would return to their long-run average level of just under 2.6m homes in the  first quarter of next year. That would mean that the months’ of unsold homes  measure, a useful indicator of the short-term supply and demand balance, and  thus price pressures, would rise from 4.9 to 5.7.

In turn, that implies that the pace of house  price gains would ease notably over the remainder of this year, dampening fears  that the US housing market is again entering bubble territory.”

Here’s a longer term look at housing supply and demand.