Mortgage interest rates have risen to seven-year highs, which has pushed refinancing activity down to 10-year lows. Demand for home purchase mortgages is faring better, but even so buyers are still being put-off by the lack of inventory. Those tight market conditions are supporting homebuilder confidence which, despite edging back in March, is close to 19-year highs. But with annual growth in single-family building permits reaching a 19-month low in February, that has yet to boost home construction. On the multifamily side, the surge in starts seen in January was fully reversed in February, and looking through the volatility building activity has been fairly stable in recent months. Coupled with strong rental demand that led to a drop in the Census Bureau measure of the multifamily rental vacancy rate at the end of last year, and overall rental market conditions are tight by past standards.
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