Tuesday, 22 August 2006

UK house prices fall, impact of falling US housing market

Reuters reports that the UK house price revival is starting to flag.

Asking prices for homes in England and Wales fell an unadjusted 1.6 percent in the period from early July to early August, a survey showed on Monday.

Property website Rightmove said that brought the annual rate of house price inflation back into single digits at 9 percent from 10.6 percent in the month before.

Meanwhile Calculated Risk says that residential investment leads nonresidential investment, so that "typically recessions are preceded by declines in residential investment". He also says that new home sales is "an excellent leading indicator", noting that historically, when the year-on-year change in new home sales falls about 20 percent, a recession usually follows. This translates to a 1.05 million figure today.

Incidentally, I had also mentioned the 20-percent figure in my post entitled "US housing market flashes warning on economy".

Data on existing home sales and new home sales will be released on Wednesday and Thursday respectively.

1 comment:

Highest CD Rates said...

This is something new to me. As house prices are at same level or I can say a bit on lower side when compared to house prices of 2006.

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