The US housing market seems finally to be cooling down. But the morning after the bubble will almost surely bring an ugly hangover; one with a combination of higher inflation and lower growth.

Since the turn of the 21st century, housing prices in the US have risen by more than 60 per cent. Overall, from 2000 to 2005, the value of residential real estate in the US has gone up by about $10,000bn (€8,300bn).