In the United States, pent-up demand for single-family homes is as high as 6.5 million units. But supply is very limited because many homeowners are locked into existing mortgages with rates as low as 3%.  Because of inflation, caused by excess stimulus and global supply chain disruptions, prices for single-family homes have soared.

Now housing inflation has stabilized, and the outlook for interest rates is turning positive.

With inflation falling faster than expected and the Federal Reserve nearing its 2% price inflation target, the process of normalizing interest rates is about to unfold. As the Fed cuts rates, the cost of conforming 30-year mortgages will also fall. Today, the cost of a conforming 30-year fixed-rate mortgage is about 6.8%. A conforming mortgage is a mortgage Fannie Mae or Freddie Mac can purchase. Those two companies improve liquidity in the mortgage market. Most mortgages in the U.S. are conforming.

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