House prices and the economy
UK housing figures just out show that prices have risen fairly strongly this year, but are slowing.
Based on sold properties, the Land Registry reports that prices rose by 7.1% in the year to the end of November, but also that they fell by 0.1% in November from the previous month.
Mortgage lender Nationwide similarly reported an increase of 7.2% for 2014, with slowing growth toward the end of the year. Over the weekend, another lender that issues house price indexes, Halifax, also reported a similar trend.
It comes on the back of estate agent Knight Frank's report that the UK is ranked as the fourth fastest-growing housing market in the world. In the year to September, house prices rose by more than 10%, which was not far behind the leader, Ireland, where home prices rose by some 15%.
London continued to register the fastest growth rates. Nationwide says that average prices rose by 17.8% over the past 12 months and reached £406,730, which means that prices in the capital are now 35% above their 2007 peak.
When I asked the chief economist of Nationwide if that's unsustainable, he said that it wasn't sustainable. Robert Gardner sees signs, though, that house price rises are slowing and converging with earnings growth.
That would mean quite a slowdown. Wages have not been growing by 7% to 8% and are unlikely to, so could house prices really stagnate next year?
And if they did, would economic growth suffer? After all, our homes tend to be the biggest asset for most households. So, if prices don't grow well, then we might worry about our wealth and even if our mortgages are affordable and curtail our spending.
But, on the other hand, household debt has hit record levels and is higher than even before the crisis. A large part of that is mortgage debt, so it's more secure than consumer debt, such as those borrowed on credit cards.
Still, if house prices continue rising, then that could prompt people to buy properties that stretch their finances. Affordability is an issue that hasn't gone away.
Another striking statistic today is from Genworth, an insurance firm that's analysed government data. They find that there are six babies born per every house built. And that's been the case since 2010.
It captures the supply constraint which has pushed up prices. In fact, house prices recovered before the economy, reaching their pre-crisis peak last year after plunging by more than 15% during the 2008 recession.
This is why whenever another report on house prices comes out, there are worries if they're up and if they're down. In terms of the economy, it's clear - greater supply and sustainable price rises would work best. It's just tough to get there.