The current repo rate is 2.25 percent and is expected to remain so for a while, according to SBAB. The bank believes that the Swedish Central Bank will implement another rate cut this year, although the assessment was made in May. Now, they do not rule out a May rate cut, but the main scenario is that households will have to wait until after the summer.
"The unexpectedly high inflation in January, together with the previous months' rise in inflation, is likely to contribute to there being no further rate cut before the summer," says Robert Boije, the bank's chief economist, in a comment.
This means that the variable mortgage rate will not fall below 3 percent by the summer, according to SBAB's assessment.
They still believe that the repo rate will be cut at least once more this year, given that the Swedish economy "continues to struggle" in terms of households' consumption and companies' investments not taking off as expected in the previous forecast.
SBAB's assessment is that housing prices are expected to rise by almost 6 percent this year and 4 percent in 2026.
"A larger increase than that will require significantly lower long-term mortgage rates or a significant boost in the economy and households' incomes without inflation and interest rates rising too much. We do not see that happening now," says Robert Boije.
