WORKING out the right time to buy a house is always hard. Homes are horribly expensive. The slightest up- or down-tick in the market can cost or save huge sums. In America, those mulling a purchase are hearing particularly confusing signals. Prices have soared for the past couple of years, suggesting that those who wait will suffer. But slowing prices, weak construction data and jitters about a possible interest-rate rise (among other worries) suggest that prices might drop, as they did five years ago. Perhaps scrambling onto the housing ladder now is unwise after all?

Homebuyers have cause to be nervous: during the crisis of 2008 and 2009 prices fell by 60% in some places. Yet since then America has bounced back remarkably. Median property prices in the north-east are well above previous highs, having risen by 51% between 2009 and 2013. Prices in the Midwest and South pipped previous peaks in 2012. Only in the West are homes worth less now than in the bubbly mid-2000s. Yet prices there are rising fast: by over 11% in 2013. At that pace, they will beat past records by the end of this year.

Some worry about this rebound. Peter Wallison of the American Enterprise Institute, a conservative think-tank, warns that a new bubble is forming. Mr Wallison reckons rents are a good yardstick: house prices that rise in line with rents make sense, since both are a sign of high demand. But when house prices outstrip rents, as has been the case recently, buyers should worry. An analysis of 20 cities by The Economist shows that homes in Denver, Boston and Los Angeles all look over-priced.

There are already signs that the market is stalling. Data released by the National Association of Realtors (NAR) on April 22nd and 23rd reveal a bloodless market. Existing home sales were down for the seventh time in eight months, and are 7.5% lower than in March 2013. New-home sales were even worse, down 14.5% between February and March. Price rises are slowing: data released on April 22nd showed annual rises of 6.9%, down from over 8% a year ago. Prices in New England dropped a startling 2.5% in a single month.

Explore and compare house prices in 20 US cities over time with our interactive house-price tool Yet despite these omens, there are still reasons for buyers to be brave. For a start, the steady flow of cheap “distressed” housing is drying up. Between 2008 and 2011 over a third of all sales each year were in this category: either foreclosed homes or those being sold at a loss, often by banks. That backlog is clearing, with only 11% of sales in 2014 expected to be distressed stock, according to Lawrence Yun, the NAR’s chief economist. In 2015 it could be as low as 6%.

And the pipeline of new houses is hardly gushing. In fact supply is severely crimped, says Mr Yun. During the financial crisis many small builders went to the wall. The survivors are finding it hard to obtain loans to build more homes. This helps explain why supply has not responded to perky prices: the pace of building is still far below its pre-crisis average across America (see chart). The larger builders, who can borrow more easily, have the field almost to themselves. With less competition, prices may drift higher.

Even if supply does improve, new homes will not be cheap ones. Construction costs are rising fast: by 15% in the past two years. Median prices of new and existing homes have diverged, with a new pad costing 38% more than a lived-in one.

The recent data also make a rate rise even less likely. Falling household debt and a rising number of cash-funded sales will ease concerns at the Federal Reserve. In addition, predictions of a future rise have already made buying tougher: 30-year mortgage rates were 4.34% in March, up from 3.57% a year ago. That combination—higher rates, lower leverage, and evidence that high prices reflect supply constraints more than speculative demand—means that the central bank has little reason to make homeowners’ lives any harder. At least, not yet.