The new Case-Shiller national house price index, now released on a monthly basis, shows seasonally-adjusted prices falling in each of April, May and June. This is a dramatic reversal from the average 0.7% monthly gain of the previous two years. While other indices have not posted outright falls, they also show annual price inflation slowing to around 6%-8%. The recovery in existing home sales – the largest segment of sales activity – means that house price inflation may not have slowed further during Q3. But by the end of the year we expect year-on-year price gains to be as weak as 4%.
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