Few indices are watched more closely than those that track house prices. On one level that’s rational. Two thirds of households own their own home, most of them with a mortgage.
Changes in house prices therefore have a huge impact on most people’s personal balance sheet – almost certainly a much greater impact than stock-market movements. But on another level, watching what is commonly thought of as ‘house prices’ is pretty irrational, because the indices are a fairly poor indicator of the value of your home………………………………………..Full Article: Source