November continued to see a slip in home construction activity, despite inflation cooling off and mortgage rates falling. Even though the cost of borrowing is lower than it was a month ago, affordability is still a major concern causing potential home buyers to stay out of the housing market. Homebuilders are still reacting to the lower levels of demand by limiting their production, permits for homes fell short of consensus and down over 20% from a year ago. And while lower prices and lower rates mean that more would-be buyers can jump back into their housing search, seen by an uptick in mortgage applications, the limited available inventory fueled by both existing homeowners and homebuilders will keep the market tight, price declines minimal, and competition for desirable homes alive. But homebuilder activity from months past is finally paying off, an increase in the number of completions in November, and an increase in single family completions specifically, will help to boost the inventory starved market this winter.