Housing activity constrained by lack of inventory

The latest drop in mortgage interest rates has not boosted housing market activity, which is being constrained by a severe lack of inventory. With housing starts faltering, we doubt inventory levels will improve much this year, so home sales will see little growth. Instead, prices are set to be driven up by around 6%. Rising interest rates and an increase in single-family starts should help inventory levels recover in 2018, taking some of the pressure off prices.