Swedish households are becoming more optimistic about the development in the housing market, according to a survey from the country’s largest bank.
SEB AB’s Housing Price Indicator jumped 18 points to 11 in June, indicating that more respondents now believe in rising than falling home prices for the first time in a year. The result adds to the picture of an increasingly brighter mood in a housing market that’s been crippled by high inflation and rising borrowing costs.
“It’s a signal that should be taken seriously and that once again shows signs of the housing market’s resilience,” said SEB’s private economist Américo Fernández in a statement.
After Swedish homes on average lost about 15% of their value since a peak early last year, the market has seen some stabilization in recent months. Most forecasters still believe prices could continue falling as the economy slows and the Riksbank is preparing at least one additional rate hike.
Households in the SEB survey — comprising 1,000 interviews during May 30 to June 6 — said Sweden’s key interest rate will be at 3.76% in one year’s time, equating to an increase of 0.02 percentage points from the previous month’s survey. That would correspond to a final rate increase from the central bank of 0.25 percentage points.
“A combination of the worst interest rate storm passing and a stable labor market is giving households wind in their sails for a more positive view of the housing market,” Fernández said.
Read More: Swedes’ View on Housing Market Brightens as Rates May Soon Peak
--With assistance from Joel Rinneby.
(Adds chart.)
