Housing Price Index and Interest Rates
Consumer Confidence Index Survey collects information on consumers’ expectation about annual change in housing price and reports a housing price index. Housing Price Index is computed based on the consumers’ perception on housing price change in next year. The index takes 1 if consumers expect housing price to increase and -1 if consumers expect the price to decrease. Since the 4th quarter of 2014, consumers have been expecting decreases in the price. In the third quarter of 2017, the index is 0.48. It has increased by 0.11 units compared to the index of the same period in the previous year and this growth is as a result of a small increase in the expectation of housing price increase and a small decrease in the expectation of decrease in housing price.
In the third quarter of 2017, expectation of stable interest rate has dominated among the consumers by 35.2 percent. However, the response “increase in interest rate” is the smallest by 16.9 percent, while 23.4 percent of consumers responded that interest rate will decrease in the next year. The response of “do not know about changes in interest rate” in the next year is 22.6 percent.