Now is a great time to buy a new luxury home in the US. So says Robert Toll, chief executive of the eponymous high-end house builder. He would say that, of course. But is he right to suggest the US housing market is bottoming out?

Property market activity has taken a big hit, with housebuilders bearing the brunt. They are discounting heavily in an effort to shift the glut of unsold homes. In an attempt to bring supply and demand back into balance, they are also building fewer homes. The pace of new construction fell by about a third in the past year. Existing home prices are now either rising modestly or declining slightly, depending on which of the quirky data sources you believe.

The slump is crimping economic growth and pushing up delinquencies among riskier US mortgages – as HSBC noted on Tuesday. But the housing downturn looks to be decelerating. Unsold inventory, for instance, appears to be levelling off. A number of leading indicators are showing signs of perking up. Mr Toll and other home builders are less gloomy than a few months ago, as are potential home buyers. Mortgage rates are lower and income growth has been outpacing house price inflation, making housing more affordable.

Meanwhile, shares of Toll Brothers and its peers have moved steadily higher from their lows five months ago. The S&P 500 Homebuilders Index is up about one third, although it remains 30 per cent shy of last year’s July peak. For Toll, the numbers are nearer 45 per cent in both cases. Investors were slow to factor in a housing slowdown and suffered from the huge hit to housebuilder earnings. But after being so badly burnt, their recent bullishness tallies with other early signs that Mr Toll could be right.