House price forecast with mortgage approvals rising

With mortgage approvals rising, the latest house price forecast projects a 4.1% gain before year-end across key growth corridors. Listed homebuilders’ forward guidance appears aligned with these projections. "After a steady downward trend through the summer, some lenders have nudged fixed rates higher again in recent weeks, tempering enthusiasm and affordability." At this point, focusing on months supply might seem arbitrary. However, months supply does better at predicting house price growth than many other relevant variables, such as the unemployment rate, the price-rent ratio, the 10-year Treasury yield, inflation, time trends and the share of the population with an age of 25-54 (commonly known as the prime-age population). Trading desks are noting correlations between the house price forecast and construction sector equities. The forecast shows a 5% climb in suburban regions, hinting at possible upside for home improvement retail stocks.