I continue to get many questions about the US housing outlook not only from clients in the US but also from accounts in Europe and Asia. The consensus view is that housing has stalled and the outlook from here is negative. This is a misunderstanding. What many don’t appreciate is that this entire housing recovery has been driven by a decline in supply and not an increase in demand. Data for short sales, foreclosures, supply, and inventory looks better than it has done in a long time. In fact, the supply is so tight that it is difficult to not be optimistic, see also the chart below. And if the economy continues to create +200k jobs per month then demand will also come along for the first time in many years. For more discussion see also our latest GEP on the housing outlook: