During the housing bubble in the States that precipitated the current world recession, US banks applied relaxed lending standards. This meant that after the honeymoon period when homeowners received mortgage support for a year expired, there was a crash.

Since the tightening of lending standards, only 1 in 663 borrowers is currently likely to fall behind on mortgage payments by 60 days or more which compares with 1 in 156 borrowers in June 2008. Underwriters are being more particular in their lending.

Recent statistics in the US show fragile improvements in house volumes year on year and average prices holding stable. The US housing market is now being built on firm foundations and as liquidity improves from lenders (as demonstrated by the massive jump in profits in JP Morgan’s profit announcement today), commentators are beginning to believe the market will tick up next spring and get to near normality a year later. This, combined with capital stimulus and cost control measures from most countries in the world, is very good news for 2013.