THERE are tentative signs of stabilisation in America's housing market. The S&P/Case-Shiller index, which tracks home prices in 20 cities, ticked up slightly in May, its first gain in 34 months. New construction of single-family homes rose in July for the fifth straight month, while sales of existing homes are expected to show their fourth consecutive month of gains when latest numbers are released on August 21st. Dig deeper, however, and the recovery’s foundations look shaky. A glut of supply will also weigh on prices, thanks to a wave of repossessions. Seized properties now account for almost one in four sales. Some 23% of homes with mortgages are underwater by one estimate, and others are even higher. Deutsche Bank’s securitisation team expects negative equity to peak at 48% of total homes by 2011.