House prices surprisingly fell in again in April. A 0.4 percent monthly drop in the Nationwide's index followed March's unrevised 0.2 percent slide and was well wide of the market consensus. This was the first back-to-back decrease since July/August last year and saw the annual inflation rate ease from 1.6 percent to 0.6 percent, a 3-month low.

The 3-monthly change remains positive at 0.7 percent, but down from 1.0 percent in the first quarter and the signs are that higher mortgage rates a number of lenders announced fresh increases just yesterday are having an impact on activity. Prices are now around 4 percent below their peak levels in the summer of 2022.

More generally, today's update puts the UK RPI at minus 21 and the RPI-P at minus 30. Overall economic activity is falling short of market forecasts.

Prices are expected to rise 0.2 percent on the month in April, reversing the unexpected March decline.

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.