LET US REVIEW HOUSING MARKET TRENDS in the United States through the first three quarters of 2017.

Economic background

The overall economic environment remains favorable for housing. Interest rates are low, the labor market has been solid and income growth, while modest, has begun to tick up.

Low mortgage rates

For most of 2017 mortgage rates have declined. Rates entered the year above 4 percent for the 30-year fixed rate mortgage, but after peaking in March, declined through September. In recent weeks rates have ticked up modestly, but are still quite low by historical standards.

The chart below shows historical mortgage rates going back to 1971.

Solid labor market

Job growth has been solid, and the unemployment rate is down to 4.1 percent.

Following revisions to the September employment data, payroll employment has increased for 85 consecutive months.

Housing supply not keeping pace with demand

Housing supply is having trouble keeping pace with demand. As we talked about housing starts are only gradually increasing and may have stalled in recent months.