Month-on-month house price growth rose to a record high in February, as households desperate to buy before interest rates increased bid up the price of those few homes for sale. But the surge in mortgage rates since then means growth will now slow rapidly, to around 8% y/y by end-22. Rising mortgage rates will also weigh on new home sales, which dropped for the third month in a row in March. We expect a further modest decline in sales to around 700,000 annualised by the end of 2022.
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