|M/M % change||0.1%||-0.9%||2.7%|
|Yr/Yr % change- 3 mo moving av||9.0%||8.6%||9.0%|
UK house prices were surprisingly weak in September according to the Halifax's latest survey. However, while the lender's HPI fell 0.9 percent on the month, its steepest decline since April 2014, it only reversed a fraction of August's unrevised 2.7 percent bounce. Certainly the decrease was not enough to impact what remains a rising trend and over the third quarter prices were up 2.0 percent versus the second quarter and 8.6 percent higher than in the same period last year.
That said, September's drop means that the latest quarterly rise equalled the smallest since the fourth quarter of 2014 and was some 1.3 percentage points short of the recent peak rate seen in the three months to June. The market may be cooling slightly.
Even so, fundamentals remain positive with record low mortgages rates fuelling demand (August homes sales posted their highest level since February 2014) and supply already at a record low and still falling. With mortgage approvals up for a third successive month in August, little is expected to alter this scenario over at least the near-term.
Halifax House Price Index is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The Index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month.
Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.
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