Home prices are falling at the fastest pace since the financial crisis

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Separate data from the Bank of England on Thursday showed that mortgage approvals fell sharply in April. Mortgage approvals for home purchases fell to 48,690, down 26 percent from a year earlier and down from 51,488 in March. Meanwhile, total mortgage lending fell to £17 billion, down 14% since March and the lowest since July 2021.

Analysts expected the number of mortgage approvals to rise to 53,000 after a steady decline in mortgage rates in recent months.

“Even with mortgage rates below 5%, many potential buyers are priced out of the market,” said Andrew Wishart, chief economist at Capital Economics.

Capital Economics warned that based on the current trajectory, the number of housing loans agreed this year would drop to the lowest level on record since 2008.

It expects mortgage approvals to fall from 752,000 in 2022 to 540,000 this year, about half the number approved in 2021 during the peak of the pandemic real estate boom.

Higher-than-expected inflation data last week caused huge jumps in gold bond yields and markets’ expectations for future borrowing costs, sending mortgage rates higher.

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