Sales of US property are expected to pick up in 2015, as low mortgage rates help to combat the mis-perception that expensive deposits are required.

Pending sales improved in November 2014, according to the National Association of Realtors, with the index ending up 0.8 per cent. Sales are now 4.1 per cent higher than November 2013 - the third month of year-on-year rises in a row and the highest year-over-year gain since August 2013 (5.6 per cent).

"The consistent economic growth and steady hiring we've seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year's end," says Lawrence Yun, NAR chief economist.

Indeed, all major regions except for the Midwest experienced a slight gain in activity in November 2014.

"With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months," forecasts Yun.

The improving economy has also led to falling gas prices, which - combined with falling unemployment - is expected to fuel growing confidence among consumers. The chance to save more money to make a deposit is also likely to boost transactions.

"There's still mis-perception out there that a much higher downpayment is needed, while that's not the reality," adds Yun.

NAR's 2014 Profile of Home Buyers and Sellers found that the median downpayment ranged from 6 percent for first-time buyers to 13 percent for repeat buyers.

Despite the improving conditions overall, though, 2014 was a year of moderation following strong recovery. 

Total existing-homes sales last year are estimated to be around 4.94 million, a decline of 3 per cent from last year (5.09 million). But 2015 is predicted to fare much better, with sales forecast to rise to 5.3 million in the coming 12 months.

The national median existing-home price for all of 2014 is expected to be close to $208,000, up 5.6 percent from 2013. This growth is likely to moderate to a pace between 4 and 5 percent in 2015.

Photo: Renagrisa

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