US housing market is finding its feet after some serious wobbles

From where we sit at the half-way point of the year, it seems that to advocate an argument on whether the market is bullish or bearish is as finely balanced as it has been for a long time.

On the bearish side, we think housing and employment are two vitally important issues that must stabilise before an economic recovery can truly take root. Without an improvement in consumer demand, it is difficult to see how the economy can return to a robust, healthy rate of growth. In the meantime, trend growth – given the headwinds of weak housing, muted job creation, impaired consumer credit markets, and absence of leverage-related growth – while representing a recovery off the “bottom”, is likely to be substantially below average. With regard to the stimulus programme, it is still i...