Monday, Jul 30, 2007
Hometrack survey shows HPI grinding to a halt
Metro: Home prices stall as rate rises bite
The Hometrack survey released today agrees with last week's Nationwide survey, showing prices rose by just 0.1% in July. The annual rate of house price inflation dropped to 5.9 per cent from 6.4 per cent in June – the third consecutive month it has fallen.
Richard Donnell from Hometrack said: 'It was inevitable that the steady increase in interest rates which began last year would ultimately impact on levels of housing demand right across the market. The slowdown has been accelerated by a rise in the supply of housing for sale over recent months.
'We expect demand to remain weak over the second half of the year as the impact of higher interest rates continues to feed into the market.'
Posted by little professor @ 02:19 AM (219 views) Add Comment
5 Comments
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1. Whiteknight said...
Somebody check the seasonality of the figures.
If i recall what has happened in previous years is that the natural slowness in growth over the summer (lots of people on holiday) , Autumn & Winter (less good times to move) have typically been interpreted as slow downs.
In these cases the MPC has stopped doing what is necessary (and on one occasion done the opposite of what was necessary) only to find out in the Spring surge that house price inflation and mortgage equity withdrawal are still going strong.
This time it could be different due to the credit market blow out, but I would be extremely cautious about seasonality even though i dont have figures to hand.
2. paul said...
Wahey!
You would have been better off with your money in a savings account, where you can get 6.5% AER than in housing over the last year.
Once a few more people understand that, I suspect this trend will accelerate.
I suggest Kirtsy Allslopp starts chewing that musty felt hat now - it'll take a while to soften up!
3. doomwatch said...
How convenient. Just in time for the MPC meeting coming up.
4. little professor said...
Last July they rose 0.6%, which they described as disappointing. So 0.1% is more than just a seasonal variation.
5. bidin'matime said...
Back to those 0.1% movements again - they must be getting nervous...