Even the biggest investment bubbles eventually correct themselves. When that happens, it is time for changed thinking. That is particularly true when the bursting of the bubble in question – in US residential housing – nearly brought down the entire global financial system.

The US housing market’s correction after that bubble appears to be finally at an end. This shows up in house prices, where the latest reading of the Case-Shiller 20-city index this week showed an increase over the past 12 months.

The Case-Shiller index has had a couple of false dawns, but other data support it this time. Activity is picking up, and supply – by the most popular definition of the number of months it would take to sell off the existing inventory of unsold houses – is under control.