House prices continued to hold up better than expected in March. A 0.8 percent monthly rise easily beat the market consensus and followed an upwardly revised 1.2 percent spike in February. The latest gain means that, according to the Halifax, prices have now risen for three straight months for the first time since April-June 2022. However, annual inflation was 1.6 percent, down from 2.1 percent in mid-quarter and its weakest print since October 2019.

The quarterly change, the best guide to underlying developments, now stands at minus 0.4 percent, still indicating a weakening trend but up sharply from minus 2.5 percent in the three months to February. Recent falls in mortgage rates - a typical 5-year fixed rate deal is down by more than 100 basis points over the last few months - has provided a useful boost to demand. Improved consumer confidence and a still tight labour market have also helped and supply remains supportive. Even so, the near-term outlook remains soft.

More generally, today's update puts the UK ECDI at 1 and the ECDI-P at a 2. Both measures show that overall UK economic activity is performing much as expected.

Prices are expected to fall 0.3 percent on the month after a surprise 1.1 percent jump in February.

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 the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest 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.