Home sales are showing signs of life, with both new and existing home sales rising for the second month in a row in October. However, the inventory of homes for sale has continued to decline, and that is hurting buyer sentiment. Mortgage applications for home purchase rose marginally in November, but the bigger picture is that they have made no sustained upward progress since the start of 2016. That will keep a lid on house prices. We think the current annual growth rate of around 6% is close to a peak.
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