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Matt Phillips: With the recent decline in inflation rates over the past few months, U.S. real estate stocks have seen astonishing gains. Investors seem to have concluded that the Federal Reserve will almost certainly cut interest rates at the next meeting (although there is still some debate about the extent of the rate cut). Of course, the real estate market is a typical representative of interest rate-sensitive industries in the economy. The expected Fed rate cut has transmitted through the bond market to lower mortgage rates, with the current 30-year fixed mortgage rate at around 6.50%. This should stimulate homebuyers' activity. The remarkable rise in homebuilder stocks recently is happening against the backdrop of a severe shortage in actual home construction. New housing starts in July fell to the lowest level in four years - admittedly, this may be due to adverse weather conditions - but still! How do we explain this? Those who believe that the financial markets know everything may say that savvy traders are simply pricing in the expectation of increased activity as they see mortgage rates decline. Cynical observers might simply point out that the current state of the real estate market - low inventory, high prices - means that homebuilders can make Wall Street's expected money without needing to build as many houses