| Pre-owned home sales up 0.4% nationally
Existing-home sales rose slightly in November, a hopeful sign of stabilization in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors, which performed the study. Across the nation, pre-home sales rose 0.4 percent to a seasonally adjusted annual rate of about 5 million units, up a bit from the 4.98 million units sold in October 2007. Still, the sales figures pale in comparison to the 6.25 million-unit level recorded in November 2006 -- representing a 20-percent drop. "Near term, existing-home sales should continue to hover in a narrow range, just as they have since September," said NAR economist Lawrence Yun in a statement released Dec. 31. "And that's good news because it will be a further sign that the housing market is stabilizing." Mortgage interest rates are near historic lows, and the most current data shows decelerating price declines, Yun said, along with a modest reduction in the number of homes on the market.
US rate cuts to boost house prices in Dubai, Abu Dhabi and Hong Kong
Hong Kong residents are perhaps more used to playing their property market than people living in the Gulf, whose freedom to buy has only emerged from relatively recent market liberalisation. They have therefore been quicker to recognise what lower interest rates mean for real estate and mortgage applications are up by 50 per cent; and to be fair the Hong Kong banks have also been much quicker to adjust mortgage products to take advantage of low interest rates. House price inflationBut lower finance costs ripple across the whole property development chain from land prices right through to secondary sales. If it is cheaper to finance development then profits are bigger. If home finance costs are falling, and look likely to fall further, then more buyers will enter the market. It is an upward price spiral or house price inflation that will result.
How you can survive a recession
Stockmarkets in turmoil, falling house prices and a warning this week from the head of the Bank of England that we should brace ourselves for a tough 12 months. All in all, the prognosis is not good. In our front-page article, we look at ways of benefiting financially from a possible recession. But for many people, it will not be making money out of a downturn that is uppermost in their mind - it will be how best to insulate their finances so they do not end up worse off. Here, Guardian Money offers advice on how to make your finances recession-proof. Mortgages The good news is that the US Federal Reserve's decision to slash interest rates this week puts further pressure on the Bank of England to take similar action here. That could mean lower borrowing costs for millions of mortgage-holders.
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