Tension between a strong underlying US economy higher US home prices increases - ING

So, the tension between a strong underlying economy and increased costs for homebuyers is increasing, analysts at ING explained.

Key Quotes:

"The US housing market is giving mixed signals. We think the trend remains upwards, but headwinds are increasing."

"This month's US housing data presents a bit of a mixed bag. On the one hand, new housing starts and permits both increased noticeably to 1.326m and 1.396m respectively. These beat expectations by around 100k and suggests home builders are in a bullish mood. 

Robust momentum in the US economy, including a pick-up in wage growth, and low inventory levels suggest new construction is set to increase further in 2018. This will support US growth, which we expect will reach 3%"

"The tension between a strong underlying economy and increased costs for homebuyers is increasing. We expect this theme to remain key to the US housing market this year.

It is too early to say whether the weakness in sales we’ve seen early this year is temporary or the start of something more worrying."