The housing market looks a little uneven these days, doesn't it?

Home prices are rising. Homeownership rates are falling. Houses for sale are vanishing. And rents are increasing, along with the number of people choosing apartment living over homebuying. The national homeownership rate hit 63 percent in the second quarter, its lowest point since 1965, according to the U.S. Census Bureau.

Yet people are still purchasing homes in record numbers. Just last month, new home sales saw their biggest leap forward since housing imploded in 2007, according to data from the U.S. Census Bureau and Department of Housing and Urban Development.

On the other hand, we learned this week that existing home sales fell for the first time this year, to 5.39 million, a 3.2 percent decline.

 

What should we make of all this?

Affordability and housing inventory will remain barriers for would-be homeowners and current renters itching to enter the market. But there's a bright side: Historically low interest rates still make buying and owning a home a more feasible option and worthwhile investment compared to renting in many U.S. cities.

How did we get here?

Blame this year's abnormal housing environment on a series of events that collided at the same time.

First, the amount of homes available for sale has dwindled, falling 5.8 percent within the last year, according to the National Association of Realtors. That drives up prices, especially when combined with consumer demand, wage growth and a slowdown in overall home construction.

A hike in cost inevitably turns off first-time homebuyers, who feel they are unable to afford a mortgage while paying off other debt, such as student loans. So, they turn to apartments.

The problem? Rental rates in many U.S. cities are rising at a rapid pace, with a number of tenants devoting more than 30 percent of their income to rental costs, according to a study from Harvard's Joint Center for Housing Studies. That's because, just like with housing inventory, the number of people ready to rent outnumbers the amount of affordable rental units.

Still, 70 percent of renters said they feel renting is more affordable than buying a house, according to a Freddie Mac survey released earlier this year. On the other hand, 52 percent of those same respondents said they plan to buy a home, likely within the next three years.

Strike while it's hot

Given certain economic factors, they may not want to wait too long.

After sinking to levels not seen since 2012 following Brexit, yields on the 10-year U.S. Treasury Note meandered along with the current trading range of 1.5 percent to 1.6 percent. After Federal  Reserve Chair Janet Yellen's remarks Friday we have moved outside the range on the high side for the first time since the end of July, currently trading at 1.62 percent.  See the one month chart below. We are still not far from record lows. This week, the rate on a 30-year conventional mortgage averaged at 3.57 percent, still far lower than what we've seen in the market in decades.

For borrowers looking to buy or refinance, that means cheap money. Coupled with the bevy of mortgage loan options that help with down payments, renovations and mortgage insurance, it also means opportunity for the cost-conscious buyer.

How long will this last?

Though mortgage rates have trickled upward in recent weeks, the movement has been slow.

Will that change in the months ahead? It's up for debate. On Friday, Federal Reserve Chair Janet Yellen told the Jackson Hole Economic Symposium that the case for a rate hike this year had "strengthened" based on recent economic indicators, such as positive employment growth. The Fed implemented its first rate hike in December 2015 since keeping rates near zero since 2008. The market is now weighing the probability that Yellen and the Fed will raise rates at its Sept. 20-21 meeting, or perhaps when they meet again in November or December.

"The [Fed] expects moderate growth in real gross domestic product, additional strengthening in the labor market, and inflation rising to 2 percent over the next few years," Yellen said. "Based on this economic outlook, the [Fed] continues to anticipate gradual increases in the federal funds rate will be appropriate over time."

Federal Reserve Vice Chairman Stanley Fischer told CNBC on Friday that he wants Fed decisions to be based on forward-looking indicators, rather than past performance. He said the next rounds of jobs numbers will be impactful, but cautioned investors against reading too much into every data release.

“You can always find a set of data that will enable you to build a different case,” he said. “That's the hard part.”

Even with the uncertainty around the Fed, we believe low mortgage rates are here for foreseeable future as demand for U.S. Treasurys remains high. Even if the Fed raises rates sometime this year. there is so much global uncertainty including our own Presidential election the pace of any increases will be slow and methodical. Investors will continue to seek safety in government-backed securities, which will continue holding up bond prices and keep yields and rates relatively low for the foreseeable future.

Those factors, taken with the reality of rising rents, makes the market ripe for many homebuyers, even as supply and rising prices continue to create some headwinds. The rest of this calendar year and into 2017 gives renters a good window to make leap into ownership.