This pickup suggests that profit margins were minimal at best a year ago and hence that exporters were willing to lose some U.S. market share rather than compress margins still further. A noticeable downtrend in the share of European exports in U.S. imports has been apparent over the past year.
Indeed, low rates combined with falling house prices have contributed to historically high levels of housing affordability (chart 26). At the same time, rents have been rising, which should make homeownership a more attractive option relative to rental housing (chart 27). Despite this record affordability, home purchase and mortgage refinancing activity remains muted.