|M/M % Chg||0.1||0.1||0.0|
|Y/Y % Chg||4.6||4.4||4.6|
House prices edged up just 0.1 percent on the month in November according to the new Nationwide survey. The increase, which followed an unrevised flat reading in October, saw the annual inflation rate slip a couple ticks to 4.4 percent, equalling its lowest level since November 2015.
The deceleration in prices was probably best reflected in the quarterly rate which, at 0.9 percent, was 0.3 percentage points below the comparable October print and 0.6 percentage points short of its reading at the start of the year. Even so, it remains comfortably within the range seen over the last couple of years and continues to be supported by the tightness of supply conditions and modest rates of new home construction. Moreover, with October mortgage approvals and lending both making fresh gains, record low mortgage rates would seem to be providing some additional underpinning for demand.
Against this backdrop, Brexit uncertainties may have some negative impact but house prices can probably sustain a modest rate of growth over coming months and quarters.
The Nationwide House Price Index (HPI) provides house price information 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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