Most US housing data have looked considerably better this year compared to 2013-14

Most US housing data have looked considerably better this year compared to 2013-14. New and existing home sales have jumped by 10% or so over 2H14 levels, housing starts have done the same and building permits continue to climb. Home prices have haven't done as well. Case-Shiller prices have run sideways-todownwards since March and markets expect only a one-tick rise in July (report today). That's taken on-year price growth down to 5% YoY from the 12%-14% pace seen throughout most of 2013. Clearly a 5% appreciation pace (or less) is fine from the longer-term perspective of sustainability. But 6 years into the recovery, some 14%-15% of home owners still owe more on their homes than they can be sold for. Faster price increases would free them from the negative equity burden that suppresses consumption and, in many cases, the ability to look for jobs in faster recovering parts of the country. 

Negative home equity ratios have improved greatly from the 30% ratio seen at the peak of the crisis. But with 2% being the historical average, recovery is only about 55% complete. Roughly the same recovery ratio is seen in house prices per se. If consensus is correct about July, national average house prices will have recovered 60% of their ground lost during the crisis. Good progress. But at the current pace, full recovery will take another 4 years. Like in labor markets, investment markets (K:L ratios) and household balance sheets, much slack remains in the housing sector, 6 years after the economy hit bottom.