“Interest rates will be UP a bit + home prices have gone up as well” according to National Association of Home Builders Chief Economist Robert Dietz. Interest rates will probably go to 4.5% by mid-year. Inventory shortages have fueled bidding wars. The new tax law is expected to contribute to price softness in some high-cost, high-tax markets now that deductions for income and property taxes are capped at $10,000 per year.