Williams, John

Despite all this good news, there is one area of concern, which is housing. Historically, most recessions have been followed by housing revivals, which significantly boosted the early stages of recovery. I therefore expected housing to be a much stronger tailwind by now. While home construction and sales showed substantial momentum in 2012 and the first half of 2013, the wind has been taken out of the sails since then. Much of the slowdown in housing-market activity appears to be due to last years jump in mortgage interest rates. Although that is unlikely to reverse, other factors driving this sector should improve and I remain cautiously optimistic about the outlook for housing over the next few years.