Further sharp drop in house prices unlikely

The rise in house prices in October was a challenge to our long-held view that high borrowing costs will cause them to drop further. The resilience of prices in part reflects longer mortgage terms, which are reducing mortgage payments. And a tight labour market and generous forbearance are preventing forced sales. Those factors make the 6% further drop in prices in our current forecast unlikely, so we will pare it back in our forthcoming Outlook.