Ongoing confidence in the housing market and falling unemployment are the likely reasons behind the Reserve Bank’s decision to leave the official cash rate on hold this week.

Mortgage Choice CEO Susan Mitchell says the nation’s improving unemployment – which fell to 5.1% in December – was a reason for the RBA to defer a rate cut. The CPI also rose 1.8% in 2019, which was better than expected.

“Another reason the RBA may have decided to hold the cash rate this month is dwindling consumer confidence,” she says. “