Economists see the report as a sign of the housing market gaining strength. “The house price rally still has a long way to go. The most important driver will be the dwindling supply of new homes. Thanks to a combination of an extended period of underconstruction … and a fewer foreclosures, the inventory-to-sales ratio fell in December to the lowest level since May 2005,” said Harm Bandholz of UniCredit Research. READ MORE