The latest report from Freddie Mac shows that despite some recent bumps, the U.S. housing market remains on track to exceed last year’s best-in-a-decade levels for housing starts and home sales.

Highlights from the June outlook released last week include:

• May marked the 80th consecutive month of job gains. The nationwide unemployment rate dropped another 0.1 percentage points to 4.3 percent.
• Housing starts fell 2.6 percent in April and permits for single-family homes also declined. After a strong March, home sales also a took a hit with new home sales falling 11.4 percent and existing home sales falling 2.3 percent in April. These recent declines are expected to reverse as low mortgage interest rates and solid job gains boost the housing market, according to the report.
• Average mortgage rates have declined more than they have risen in recent weeks. However, they are still almost 50 basis points higher than last year’s low. Unless rates fall below 3.5 percent for an extended period, refinance volume will fall short of last year’s levels.
• Strong demand and a short supply of housing in many markets continues to push house prices higher. In the first quarter of 2017, the homeownership rate was 63.6 percent – six percentage points lower than its peak in 2004, when it reached its all-time high of 69.2 percent

“After a strong March, the housing market, from housing starts to new and existing home sales, took a hit in April,” Sean Becketti, Freddie Mac’s chief economist said in a statement. “The recent declines are likely to reverse as low mortgage interest rates and solid job gains boost the housing market. We expect housing starts and home sales to firm in the coming months and for 2017 to exceed 2016’s best-in-a-decade levels.”