"If market rates come down, it normally takes us 2-3 months to pass it on because our liabilities get re-priced," HDFC. The RBI has raised interest rates 13 times since March 2010, by a cumulative 3.75 % in its efforts to domestic inflation.

HDFC says home loan seekers can expect a 0.5-0.75% decrease in rates in front of the festival season if the RBI reduces rates later this month.

high interest rates have not had much impact on home sales falling in the Rs 20-50 lakh bracket, whether in big cities or Tier II cities, because the need and demand for homes in this price range continues to remain high. HDFC home loan portfolio has increased in the last one year, but did not share the numbers.

What they need is better supply of homes," Karnad said. She said that the market expects a 10-15% cut in home prices, which seems to be high. Karnad also pointed out that builders are faced with rising cost of construction. Prices of cement, steel and labour have grown in the last two months, she added

Home loan growth in smaller cities too has been phenomenal. Cities like Vadodara, Lucknow, Chandigarh and Salem have seen 30-40% 0growth in home loans. "These markets might be small and this growth might be on a smaller base, but the fact is that there is demand.