The US home sales growth is slowing down while consumer confidence in the housing market is at a five-year high. The interest rates on mortgage loans have been declining since the beginning of the year. The 30-year flat-rate interest rate is now at 3.82% on average – about a two-year low, according to Freddie Mac.

Historically low interest rates are a prerequisite for the growth of housing transactions. There is great hope that this cycle will be repeated this year, as the current housing market that is very sensitive to interest.

At present, however, consumers do not show enough interest in buying homes. Last week, mortgage loan applications grew by only 1% compared to the previous week, down 2% from the previous week, according to data from the Mortgage Bankers Association.

The latest data on home sales is not encouraging. In April, upcoming sales fell (-1.5%) for the 16th consecutive month, according to data from the National Association of Real Estate Traders.

Why, against the backdrop of record low interest rates, home sales are not rising?

In recent years, it is commented that there may be a large number of homeowners who are limited by low interest rates on their mortgages. The point is that many people already own their homes pay extremely low interest rates on their mortgages. Due to the rise in mortgage interest last year, however, they have abstained from buying a new home. If this was the reason, it would have to increase the sales of dwellings this year at lower interest rates.

Interest rates are just one part of the puzzle for those who already have a home and are looking for a larger or more expensive home. Although the pace of housing price hikes is slowing down, they are at historical peaks in many regional markets, which offsets the effect of lower interest rates. Not to mention that many of the current homeowners who bought their homes after the housing crisis pay even lower rates than current ones.