By the end of January mortgage interest rates had risen to close to four-year highs, and the expectation of that rise briefly boosted mortgage applications for home purchase to eight-year highs. But demand has since edged back, and single-family activity will continue to be constrained by very low inventory. The multifamily rental vacancy rate dropped to 8.3% in the final quarter of 2017, reversing much of the rise seen over the previous three quarters. A decline in the share of young adults living with their parents is starting to boost household formation and, with so few homes for sale, demand for rental accommodation will hold-up.
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