The sharp fall in mortgage interest rates seen since the start of the year has not spurred much of a recovery in housing market activity. Home sales and housing starts have more-or-less held their ground, and house price growth has been on a steady downward trend since May last year. With concerns around the economic outlook growing, we doubt housing market activity will see much of recovery in the second half of the year. That said, stronger earnings growth has given rents a boost, and subdued home sales will support rental demand even as household formation slows over the next couple of years.
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