Quotes from TD Economics:- A 30 basis point drop in mortgage rates earlier this year have delivered households an offer they can’t refuse. With mortgage rates at record low levels, housing affordability has improved. Cuts to interest rates of that degree have typically boosted sales by 30 to 40% over a six month period, which suggests the momentum may continue into October.- We continue to be surprised by the lack of listings on the market. The sales-to-listings ratio has moved back to the level reached at the end of last year, when prices were growing 8% to 9% year-over-year. This suggests that following four months of moderation, home price growth may catch a second wind through the fall months.- While the housing market continues to defy expectations in 2014, we still remain of the view that housing activity will eventually cool from current levels. With home prices continuing to rise above incomes, affordability will become an obstacle to housing demand once interest rates do eventually begin to rise. In addition, there remains a record number of new homes currently under construction, some of which are likely to end up on the existing home market, although construction delays suggest it may happen later than expected.
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