If you're pinching yourself with joy that mortgage interest rates are still at historic lows, you're not alone. Buyers all over the nation are taking advantage of continuing record low interest rates even while the federal government attempts to influence long-term rates by raising short-term rates.

On June 30, short-term rates were increased once again, yet yields on 10-Year and 30-Year Treasury Indexes dropped lower, allowing 30-year mortgage interest rates to drift down to 5.53 percent. The spread between short and long-term rates is narrower than it has been in five years.

Almost reluctantly, the rate rose at the end of last week to 5.62, still bafflingly low.

This situation creates stimulus for homebuyers which is shown by the latest Pending Home Sales Index. Single-family and condo sales have slipped from near-record levels in April but are higher than in May, according to the National Association of Realtors®. The index stands at 124.9, second only to a record o 128.1 in October 2004.

A sale is pending when the contract has been signed but the transaction has not closed. Pending home sales typically close within one or two months of signing.

David Lereah, NAR's chief economist, said the index shows robust home sales can be expected for July. "Pending home sales are at the third highest on record, so we're looking at a banner year for the housing market," he said. "To put the index in perspective, we're running about 25 percentage points higher than what is considered to be historically strong."

April and May were the highest months on record for existing-home sales.

Meanwhile, there's always news to watch in other sectors that may affect housing. Corporate announcements of job reductions increased by 35 percent in May, and were up 92 percent since April. Yet, total employment reached a four-year low of five percent, which is something to celebrate, considering jobs, along with the property, are the collateral that secure mortgages.

The economy is slowing, particularly in the manufacturing sector. With oil prices hovering at $60 a barrel, consumers are starting to hold on to their money, but are still spending freely in retail sectors.

The economy is still being supported by jobs in the service industry, which were up in June. And the housing industry is accounting for approximately one-fifth of the nation's Gross Domestic Product.

This is one reason why real estate sales has become one of the great go-to job markets. The National Association of Realtors has reported a 25 percent gain in membership over the last five years.

Realtors are considered the cream of the real estate industry. Only members of the NAR can call themselves Realtors. They adhere to the organization's code of ethics and standards of practice. Realtors also have one of the most powerful lobbying groups in the world which is responsible for many homeowner benefits that you may not know about.

Realtors lobby their state legislatures and Congress to keep property taxes low and to hold on to the mortgage interest rate deduction. Thanks to Realtor lobbying, homeowners pay zero capital gains on homesteads occupied for two years or more within a five-year period up to $500,000 for couples and $250,000 for singles.

Now that's easy money.

Tax benefits are among the reasons why homeownership is at all-time record highs of nearly 70 percent. And as long as housing continues to outperform other investments, housing prices will continue to rise.

Published: July 15, 2005

Use of this article without permission is a violation of federal copyright laws.