Housing finance jump a sign of rate cuts Home borrowing approvals rose in September after the Reserve Bank cut interest rates. A JUMP in the number of new home loans during September is another sign that interest rate cuts take time to boost the economy, an economist says. The number of owner-occupier mortgages approved rose by 4.4 per cent in September, which followed a four per cent drop in August, official figures show. The increase came a month after the Reserve Bank of Australia (RBA) cut interest rates to a record low of 2.5 per cent. "Interest rate cuts do take time to work their way through the economy so that's what we're seeing," Commonwealth Bank associate economist Diana Mousina said. Even though we might get some volatility month by month, the overall trend has been quite a sustained upturn in housing activity. During September, there were 51,928 mortgage approvals, compared to 49,733 approvals in August. Economists had expected the number of housing finance commitments to rise 3.5 per cent in September. Total housing finance by value rose 5.3 per cent in September, seasonally adjusted, to $25.151 billion, the Australian Bureau of Statistics said on Monday. Ms Mousina said the RBA appeared to be finished with cutting rates. We see the 2.5 per cent as the low for this cash rate cycle. We think the RBA has probably done enough at this stage to stimulate activity in the housing market," she said. JP Morgan economist Ben Jarman said that although investor activity had remained steady, it appeared first-home buyers were being priced out of the market. "We've seen new loan writing proceeding at a pretty robust pace throughout this year and it continues to be driven substantially by the investor community," Mr Jarman said. Their share of new loans held relatively steady, whereas the first home buyer share has fallen yet again - it is now just around 12 per cent which is the lowest in the history of the recorded data. They continue to be priced out which, we think, has been an important phenomenon in keeping overall credit growth pretty low, because first-home buyers being younger and earlier in their careers tend to have less assets and tend to take out larger loans.