UK (Common Wealth) _ On an annual basis, UK house prices have decreased once more, and rising mortgage rates could further squeeze the market in the months to come.
Today’s figures from throughout the country showed that, instead of the 2.7% decline seen in April, the average price of homes sold in May was 3.4% less than it was a year earlier.
Prices decreased by 0.1% on a seasonally adjusted basis in May alone, partially undoing April’s 0.4% increase.
According to Nationwide, the average price was £260,736 in May. They forecast that activity will likely stay muted in the foreseeable future.
The bigger picture is that, right before the mini-budget shook the markets and raised mortgage rates, typical home values were roughly 4% lower than they were at their high last summer.
The annual house price increase slowed down once further in May, dropping to -3.4% (from -2.7% in April), following promising hints of stabilization in April.
After accounting for seasonal influences, prices remained relatively unchanged over the course of the month, reflecting base effects. Prices on average are still 4% below their peak from August 2022.
Although the number of mortgages issued for home purchases in March was still about 20% below pre-pandemic levels, recent Bank of England data had indicated some signs of a resurgence in the housing market’s activity.
This morning, the Bank of England will publish fresh information on consumer credit and mortgage approvals, providing a window into the state of the real estate market.
Additionally, we receive health inspections of manufacturers in the US, the UK, and the Eurozone. The “flash readings” from last week indicated that France and Germany’s manufacturing sectors were struggling, therefore the numbers from today may confirm fears about a recession.
A fresh poll of employment growth across the nation will be issued at noon, and it may provide clues as to how Friday’s Non-Farm Payroll, the primary US jobs report, will proceed.
The eurozone inflation report for May is also eagerly anticipated by investors because it may provide clues about whether the European Central Bank will soon stop raising interest rates.
Following declines earlier this week in Germany, France, Italy, and Spain, the eurozone’s inflation is predicted to have decreased from 7% to 6.3%. But core inflation might be more persistent, which would be problematic for central bankers.
