Record low mortgage rates, surging home sales and tight inventory pushed annual house price growth to a 6½-year high in October, but we doubt the boom in prices will last for long. The past gain in prices has already eroded some of the improvement in affordability that lower mortgage rates provided. And, with banks set to keep credit conditions tight, buyers will not have the purchasing power to drive prices higher. We expect annual growth will have slowed to 3% by the end of 2021.
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