|M/M % Chg||0.4||0.8||0.3|
|Y/Y % Chg||5.1||5.7||4.8|
According to the new Nationwide survey, house prices were somewhat more robust than expected in March. A 0.8 percent monthly rise in the lender's HPI followed an upwardly revised 0.4 percent increase in February to lift its annual growth rate from 4.8 percent to 5.7 percent, equalling its strongest performance in more than a year.
Over the first quarter, prices were up 1.5 percent, in line with the 3-monthly change seen in February and so matching the strongest outturn since September 2014.
The buoyancy of prices probably in part reflects a temporary boost to demand prompted by the upcoming changes to stamp duty on second homes due to come into force this month. If so, house price inflation should ease again in May. That said, market fundamentals remain quite bullish, notably the near-record low level of properties for sale on estate agents' books so the underlying trend should stay positive for some time yet.
House price information is derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted that is they track a representative house price over time rather than the simple average price.
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.
Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.
Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.
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