The rebound in housing construction is being confirmed by rising home prices

The rebound in housing construction is being confirmed by rising home prices
However, because we expect interest rates to rise over the next few years, the decline in home ownership rate to level off and high new construction levels to negatively impact vacancy rates, the apartment boom is likely to show real signs of strain by late next year. More importantly, with rents rising faster than incomes, affordability will soon become a binding constraint on rents. 

For example, from 2004-2014, the percentage of households paying more than 30% of their income rent increased from 40% to 46%.2 With developers building for the top of the market, meaning high income renters, they may not yet to be cognizant of this trend, but they will soon find out that the high-end apartment market might not be as deep as they think. Conclusion Yes, housing is back. It will not be a rerun of the 2005 boom, but starts will soon approach 1.5 million units a year. The multi-family apartment boom will continue throughout 2016 as developers race to keep up with demand for urban infill housing. Nevertheless, housing activity will begin to gradually fade in 2017 as mortgage rates rise and apartment vacancies increase.