The Australia and New Zealand Banking Group (ASX: ANZ) share price certainly was on form last month.
The banking giant's shares finished the month with a gain of 6.7%, compared to a 1.3% rise by the S&P/ASX 200 index.
Why did the ANZ share price jump higher in September?
It wasn't just ANZ on the rise in September, investors were also buying the shares of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), and the rest of the banks last month.
The catalyst for this appears to have been positive signals coming out of the housing market.
According to data from the Australian Bureau of Statistics, the value of new loans issued to households increased by a sizeable 3.9% to $32 billion in July.
This was the biggest increase in almost five years and appears to show that the housing market downturn may have finally come to an end.
As ANZ and the rest of the big four banks generate a significant portion of their profits from mortgage loans, a rebound in the housing market would be a big positive for their bottom lines and dividends. It could also mean that a return to growth could be on the cards in the near future.
Should you invest?
Although there are concerns over the impact of potential changes to capital requirements by the Reserve Bank of New Zealand and falling rates in Australia, I would still be a buyer of the banks right now.
And ANZ continues to be my favourite due to its strong capital position, generous dividend, exposure to business lending, and potential share buybacks. Based on its last close price, the banking giant's shares offer a trailing fully franked 5.6% dividend.
