Mortgage interest rates saw further declines in December, and look set to drop back to 4.5% over the next few weeks. However, a spike in mortgage applications for home purchase in the first half of December was quickly reversed. That demonstrates lower financing costs on their own will not be enough to give a sustained boost to housing market activity. Indeed, pending home sales dropped to 4½-year low in November. But lower home sales are helping to support rental demand, and low vacancy rates will help prevent a sharp fall in multifamily starts and support rental growth.
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