What's going on?

A report from the European Central Bank (ECB) said that house prices in the eurozone were 1.1% higher at the end of March versus one year earlier � that included big price increases for Germany and Spain but decreases for France and Italy. This is interesting because rising housing prices can sometimes be indicative of a growing economy.

What does this mean?

The main reason why housing is strong is the ultra-low interest rates in the eurozone, which translates into lower mortgage rates. The ECB has kept interest rates near 0% since 2013 and recently enacted a policy to depress rates even further (called �quantitative easing�). However, house prices are not increasing in every country in Europe. For example, Italy and France are experiencing falling house prices, which is probably because its economies are struggling to grow despite the low interest rate environment.

Why should I care?

1. It�s good to look at this data at a national level. While the ECB says that house prices in Germany and Austria may be overpriced, stagnating prices in France and Italy suggest those countries might have to enact deeper, and more painful reforms, in order to re-ignite economic growth.
2. More generally, it shows how low interest rates can cause house prices to increase � as has happened dramatically in some countries since the financial crisis. But rates that remain too low for too long can lead to housing bubbles that wreak economic havoc when they burst.