Bethel Finance news:
Bank Leumi says in this week's macroeconomic survey that inventory of unsold homes remains low, falling to 10,222 homes in February 2011 (seasonally adjusted), amounting to 6.8 months' supply at the current rate of sales. This figure indicates the pressure driving home prices upwards.
Although a fairly rapid rise in interest rates could substantially contribute to easing housing demand, the bank says, "This scenario is unlikely at this time. A system-wide handling on the supply side could increase inventory, which might also ease the rapid rise in home prices."
The Bank of Israel notes that the measures taken so far in the housing market were preliminary and relatively moderate. Bank Leumi says that it can't point to any significant effect that these measures in mortgages market have had on the housing market or reduced demand. "It is possible that to cool the housing market, additional and harsher policy measures are needed, together with interest rate hikes, since the interest rate is still very low by historical standards."
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