Low mortgage rates ‘may spur a rebound’ in house sales

Lower availability of mortgages may have hampered the housing market on both sides of the Atlantic, but reductions in the cost of both mortgages and property could re-ignite interest in buying a home, experts say.

In the US, ‘existing-home sales’ recently increased unexpectedly by 6.5%, according to the National Association of Realtors (NAR), taking the seasonally adjusted annual rate from 4.45 million in November to 4.74 million in December.

“It appears some buyers are taking advantage of much lower home prices,” stated Lawrence Yun, NAR chief economist, while NAR President Charles McMillan said “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”

Paul Ashworth, senior economist at Capital Economics, stated that: “The subsequent decline in mortgage rates may spur a rebound in 2009, but nothing is guaranteed.”

In the UK, Ian Perry, spokesperson for the Royal Institution of Chartered Surveyors (RICS), noted that buyer interest has reached levels we’ve not seen since 2006.

However, the RICS’ December housing market survey also revealed that: ‘The average number of transactions per agency (over the last three months) is now at 10.1, a drop from 10.6 in November, and the lowest figure since the survey began in 1978.’

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Tags: house, house prices, US house prices, National Association of Realtors, RICS, Royal Institution of Chartered Surveyors, mortgage, mortgages, mortgage loans, mortgage availability, mortgage rates, mortgage interest rates, interest rates

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