Research carried out by Morningstar suggests the US housing market is showing signs of recovery after new home sales in March fell to their lowest level in eight months. Higher mortgage rates, an unusually cold winter and a shortage of properties have all had a negative effect on the sector. There have been fears that the drop in sales indicates a fundamental weakness in the market. 

But Bob Johnson, Director of Economic Analysis at Morningstar, believes there are positive signs ahead. As credit conditions and employment figures improve, and as mortgage rates stabilise, Johnson predicts: “The housing market will pick up a little more steam this year and into 2015.”