The U.S. has settled once again into a pattern of lackluster growth, but one part of the economy stands out: housing.

To be sure, the real-estate market hasn’t come close to recovering from its worst slump in modern times. Sales of new and pre-owned homes and construction on new units are still far below the historical norm. Yet like the turtle in the tale of The Tortoise and the Hare, the market continues to inch forward.

Home sales and new construction are among the key economic reports this week in a light slate of data. Also on the docket are several surveys of U.S. manufacturing that are expected to show business has flat-lined.

MarketWatch consensus

See economic calendar

date	report	Consensus	previous
Sept. 17	Empire state index	0.0	-5.9
Sept. 18	Home builders’ index	38	37
Sept. 19	Housing starts	775,000	746,000
Sept. 19	Existing home sales	4.60 mln	4.47 mln
Sept. 20	Weekly jobless claims	375,000	382,000
Sept. 20	Leading indicators	-0.1%	0.4%
Sept. 20	Philly Fed	-4.0	-7.1

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What investors want to know is whether the housing market can maintain its upward momentum even as the U.S. economy plods along.

The number of new homes on which construction has started, known as housing starts, is forecast to rise to 770,000 in August from 746,000 in June, according to economists surveyed by MarketWatch.

While that would not be a big increase from one month to the next, home builders are clearly more busy now than they were a year earlier. Housing starts have jumped 21.5% in the past 12 months.

Of course, the housing market had to rise sooner or later. The sale of new homes fell to 306,000 in 2011, the lowest on record since the government began keeping track in 1963.

A bottomed reached, home sales have improved in 2012 amid somewhat faster growth and hiring, pent-up demand and declining interest rates. A 30-year fixed mortgage, for example, fell to 3.55% last week, compared to 4.12% one year ago, according to mortgage giant Freddie Mac

The Federal Reserve’s decision on Thursday to buy billions of dollars of mortgage-backed securities could put further pressure on already-low home rates to fall, stoking even more sales. Read more on Fed decisions.

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“Mortgage rates are still coming down,” noted Sal Guatieri, senior economist at BMO Capital Markets.

He said higher home prices — a result of increase demand and short supply — could finally spur lenders to loosen tight loan standards and approve more mortgages.

Although sales and construction of new homes have picked up, the bulk of the action is still in the pre-owned market. Prices on these homes, some of which had been foreclosed and offered at below-market rates, are priced more attractively.

The latest report on existing home sales in August, released Thursday, is expected to show a 2.9% increase to an annual rate of 4.60 million. Existing home sales have climbed more than 10% over the past year.

The recovery in sales of new and used homes has been especially beneficial to the stocks of home builders. Most of these stocks have doubled or tripled in price in 2012 and sit near multi-year highs.

Take PulteGroup (NYSE:PHM) . Shares of the Michigan-based home builder have surged above $16 after languishing under $7 to start the year. And the stock traded at a scant three dollars and change last fall.

The same huge bump has occurred to the stocks of Meritage Homes (NYSE:MTH) , M/I Homes (NYSE:MHO) (NYSE:MHO) , KB Home (NYSE:KBH) and D.R. Horton (NYSE:DHI) .

At the same time the housing market is mending, the U.S. manufacturing sector has cooled off. A slew of data, including last week’s report on industrial production, show that manufacturers are expanding at a slow clip after growing like gangbusters for most of the past two years.

Two surveys the measure the outlook of manufacturing executives, the Empire State and Philadelphia Fed indexes, are not expected to show much improvement in September.

Yet the stocks of most manufacturers, like home builders, have risen over the past few months along with the broader U.S. market. A big part of the reason: The expectation that the Fed would try to goose the economy.

The willingness of the Fed to try anything to lift growth has allowed investors to benefit whether the economic news is good or bad.

“If the data are stronger than expected, it’s a buy signal for stocks, commodities and related currencies because economic stimulus is working,” said economist Avery Shenfield at CIBC World Markets. “If the data are weaker, it’s also a buy signal for those same assets, because more stimulus will be on the way.”