After a brief pause in the second half of June, record low mortgage rates helped push applications for home purchase to an 11-year high in the first week of July. That will help reverse the earlier dip in existing home sales but, with credit conditions tightening and inventory levels at record lows, sales will soon flatten out. Tight markets are however good news for the new home sector, where sales have already returned to where they were in the first half of 2019. In turn that will support housing starts, where a rise in building permits in May points to a steady recovery over the second half of the year. The shutdowns earlier in the year have pushed net absorption of rental apartments to 10-year lows. Rental growth has also slowed to 2.1% y/y and is set to turn negative later in the year.
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