Home prices likely to keep rising even as lower mortgage rates bring more supply, according to BofA

• Existing home prices should keep climbing when mortgage rates slide, Bank of America said.
• There is not enough supply to meet the demand of buyers returning to market. 
• But single-family home inventory is picking up, and homebuilder sentiment is rising.

Lower mortgage rates will bring buyers back to the market, but any uptick in inventory from sellers opting to list their homes probably won't be enough the meet demand and keep prices from rising further, Bank of America says. 

The number of existing home sales on offer fell last year as mortgage rates rose and sellers opted to wait it out to hold onto lower rates they locked in years ago. As homeowners sat it out in 2023, existing home prices diverged from those of newly constructed homes.