In the UK, house prices slowed more than expected this month after interest-rate increases raised the cost of mortgages.
The nationwide building society said prices increased by 0.3% in June to 271,613 $330,000, the slowest since September, and less than the 0.5% gain economists had predicted. The annual growth rate fell to 10.7% from 11.2% in May.
There are tentative signs of a slow down with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting a softening in new buyer inquiries, said Robert Gardner, Nationwide's chief economist.
Since December, the Bank of England has steadily lifted interest rates in order to quell inflation, which has reached a 40 year high. With policy makers signaling more increases in the months to come, economists expect a slow down in the property market, which has remained buoyant throughout most of the pandemic recession.
The economic backdrop is turning increasingly sour.
When adjusted for inflation, British consumers' disposable incomes fell by 0.2% in the first three months of the year. It's the fourth consecutive quarter of losses, the longest run of declines since records began in 1955.
Business confidence is under pressure, with a survey from Lloyds showing it fell to the lowest level since 2021 s coronaviruses lockdown as the impact of the cost-of-living crisis began to filter through to companies.
House prices have been supported by a strong jobs market for now. Unemployment is close to a 50 year low and a shortage of properties on the market is likely to support prices from an outright decline. Consumer finances are squeezed by surging inflation, so the market is likely to cool.
Nationwide and its rival mortgage lender Halifax have warned for months that price growth is likely to slow down if not fall in the coming months.
Gardner said that the Bank of England is expected to raise interest rates further, which will have a cooling effect on the market if this feeds into mortgage rates.
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