Twindig Housing Market Index 17 June 23
In the week that was dominated by rising mortgage rates, the Twindig Housing Market Index rose by 2.9% this week to 69.2
Whilst mortgage rate rises stole most of the housing-related headlines this week residential investors were more sanguine about the housing market than those writing the headlines.
Perhaps it's a case of a period of ultra-low mortgage rates coming to an end rather than mortgage rates scaling never seen before highs. Before the Global Financial Crisis the long-run average mortgage rate was 6%, broadly where they are now..
Investors also have one eye on the next general election with both Labour and the Conservatives vying and striving to be the party of homeownership it would be odd if neither party included support for the very group they are trying to woo.
Investors are also mindful that the fundamentals of the UK housing market haven't changed, there is a shortage of homes (well a shortage of the right homes in the right places), we have a growing population and the aspiration to own a home remains as high as ever. Wages are rising, mortgages are based on wages, the bank of Mum and Dad remains very well funded and the value of our homes remains considerably higher than they were before the COVID-19 pandemic.
Inflation whilst stubborn will come down. Perhaps some of the doomsayers forget that inflation can go down as well as up.