Compared to consensus, we are relatively downbeat on the outlook for home sales this year. Mortgage rates will stay close to record lows, but they will not fall further. Pent-up demand from last spring will soon be exhausted, inventory is at record lows and as the economy reopens demand from those fleeing cities will fall back. Despite that, new home sales will have their best year since 2006 and our view that single-family housing starts will average around 1.2m annualised this year is above most other forecasters.
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