GB: Halifax HPI


Thu Sep 07 02:30:00 CDT 2017

Consensus Actual Previous Revised
M/M % change 0.3% 1.1% 0.4% 0.7%
Yr/Yr % change- 3 mo moving av 2.4% 2.6% 2.1%

Highlights
House prices were surprisingly firm in the Halifax's August update. A 1.1 percent monthly increase in the lender's HPI followed an upwardly revised 0.7 percent gain in July and was the strongest outturn since last December. Over the latest three months, annual growth was 2.6 percent, reversing July's 0.5 percentage point decline.

August's bounce was large enough to lift quarterly price growth to 0.1 percent, only just above zero but still equalling its highest reading since the three months ending February.

The Halifax data contrast quite sharply with the 0.1 percent monthly fall found in the Nationwide survey released last week, although the difference in the annual inflation rate (the Nationwide's was 2.1 percent) was much less marked. With July mortgage approvals also rising for the first time in three months, there are tentative signs that the slowdown in the housing market may be starting to flatten out. Any sharp recovery still looks very unlikely given the general state of the economy but more of the same would be one less problem for the BoE MPC to worry about.

Definition
The Halifax House Price Index (HPI) 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. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and methodology remain unchanged.

Description
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.