Charts in the News: A tale of two housing busts

There has been some relatively good news from the US over the past week – a small upward revision to GDP, driven in part by stronger consumer spending; and the first rise in house prices over a twelve-month period since 2010, according to the widely-watched Case-Shiller index. On a three-month annualised basis, prices are up by more than 11% – their strongest rise since 2006. With pending home sales also rising strongly, it seems reasonable to conclude that the US housing market has decisively turned. It is hard not to draw unfavourable comparisons with the UK.

Following the slight upgrade US output is now 6.8% above its trough in the depths of the recession. UK output, however, is just 2.1% above its trough and still some 4.3% below its pre-recession peak. Whichever way you look at it, the UK does not compare well. Is this a result of UK austerity, while the US government spends? Or is something else at play?

Latest data show the US housing market has picked up and the market adjustment appears to be complete

There is still a long way to go for the UK housing market

What austerity has looked like in the UK and US

The private sector explains the divergence between the two economies

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