This speaks in favor of rising housing prices this year

After a few shaky years, experts expect housing prices to rise in 2025. But there will be no dramatic changes. When prices rose significantly, there were elements of speculation that do not exist now, says Cecilia Hermansson at KTH.

» Published: January 06 2025

This speaks in favor of rising housing prices this year
Photo: Anders Wiklund/TT

The housing market has fluctuated strongly up and down in recent years.

However, over the past year, it has stabilized. Until November, prices had risen by around 5 percent over a year, according to Svensk Mäklarstatistik.

Cecilia Hermansson, associate professor and researcher in real estate economics and finance at KTH, says that there are several factors that suggest that housing prices will continue to rise in 2025.

The primary factor is that interest rates have decreased and are expected to continue to decrease for a while into the year.

It's a bit different how households experience the interest rate decrease depending on whether they have fixed-rate loans or not. All else being equal, it affects the housing market positively, for those who benefit from rising prices, that is, she says.

Normal pace

The development on the labor market is another factor that affects housing prices. Unemployment has risen in recent years.

But unemployment is actually quite low for many of those who are also potential homebuyers, says Cecilia Hermansson.

Generally, housing prices tend to rise over time in line with incomes, according to Hermansson, which means 4-5 percent per year.

This is also what the state-owned bank SBAB is counting on in its forecasts for both 2025 and 2026.

We have looked at what factors in the past explain the development of housing prices on average over time. And there are two factors that explain a lot, says SBAB's chief economist Robert Boije.

One is how the slightly longer fixed mortgage rates develop, and the other is household incomes. Since SBAB expects the longer mortgage rates to remain stable, it is household incomes that will drive the development, according to Boije.

Cecilia Hermansson says that what could speak for a higher increase than the "normal" is that the market wants to recover a bit more from the downturn. What speaks against it, however, is that the economy has not yet taken off.

Speculation has ceased

Another thing that speaks against rapid price increases is that there is no speculation on the market today.

When housing prices rose a lot, there was an element of buying new production to sell, there was an element of speculation. That doesn't exist now. You don't buy new production to sell in these uncertain times, she says.

Political decisions also play a role. In the fall, an investigation has proposed easing mortgage ceilings and amortization.

If the government implements some of what has been proposed, it should contribute to more people being able to access financing for housing, which could also raise prices somewhat, says Hermansson.

Tags

TTT
By TTThis article has been altered and translated by Sweden Herald

More news

Markets Brace for Decline After
1 MIN READ

Markets Brace for Decline After Trump's Tariff Announcement

Food Prices Stabilize as Supermarkets
3 MIN READ

Food Prices Stabilize as Supermarkets Compete for Shoppers

EU Prepares Response to US
2 MIN READ

EU Prepares Response to US Tariffs as Trade Tensions Rise

Gold Prices Soar to Record
1 MIN READ

Gold Prices Soar to Record Highs Following Trump's Tariff News

Colombia Plans to Acquire Swedish
1 MIN READ

Colombia Plans to Acquire Swedish Gripen Fighter Jets

Tokyo Stocks Drop Sharply Following
1 MIN READ

Tokyo Stocks Drop Sharply Following US Tariff Announcement

Global Leaders Rally Against Trump's
3 MIN READ

Global Leaders Rally Against Trump's Tariffs to Avert Trade War

US Finance Minister Urges Nations:
1 MIN READ

US Finance Minister Urges Nations: Hold Off on Retaliating to Tariffs

Trump's Tariffs Higher Than Expected,
2 MIN READ

Trump's Tariffs Higher Than Expected, Experts Warn of Lingering Uncertainty

Sweden Ready to Tackle Trump's
2 MIN READ

Sweden Ready to Tackle Trump's EU Tariffs, Says PM Kristersson

Trump's Tariffs Spark Global Economic
2 MIN READ

Trump's Tariffs Spark Global Economic Uncertainty, Experts Warn

Trump Announces 20 Percent Tariffs
3 MIN READ

Trump Announces 20 Percent Tariffs on EU Goods

APM Terminals Acquires Key Railway
1 MIN READ

APM Terminals Acquires Key Railway by Panama Canal

Volvo CEO Calls Trump's Tariffs
2 MIN READ

Volvo CEO Calls Trump's Tariffs a Messy Challenge for Swedish Industry

Amazon and AppLovin Eye TikTok's
2 MIN READ

Amazon and AppLovin Eye TikTok's US Operations for Acquisition

Wall Street Gains as Investors
2 MIN READ

Wall Street Gains as Investors Await Trump's Tariff Announcement

Tesla Sales Plummet in Q1,
1 MIN READ

Tesla Sales Plummet in Q1, Miss Analyst Expectations by Wide Margin

US Private Sector Adds 155,000
1 MIN READ

US Private Sector Adds 155,000 Jobs in March, Surpassing Expectations

China Limits US Investments as
1 MIN READ

China Limits US Investments as Trade Tensions Rise

Ben & Jerry's Co-Founder Seeks
2 MIN READ

Ben & Jerry's Co-Founder Seeks to Reclaim Brand from Unilever

Nintendo Switch 2 Launches June
1 MIN READ

Nintendo Switch 2 Launches June 5 with New Games and Features

Northvolt Labs in Västerås to
1 MIN READ

Northvolt Labs in Västerås to Lay Off 550 Employees

FI Warns of Rising Fees
2 MIN READ

FI Warns of Rising Fees for Housing Associations as Costs Climb

Volvo Cars Sees 10 Percent
1 MIN READ

Volvo Cars Sees 10 Percent Drop in March Sales, Electric Models Hit Hard

Stockholm Stocks Slide as Tariff
2 MIN READ

Stockholm Stocks Slide as Tariff Concerns Hit Major Companies

Genre image
1 MIN READ

Systemair CEO Roland Kasper Steps Down After a Decade

Dustin Announces Billion-Kronor Boost as
1 MIN READ

Dustin Announces Billion-Kronor Boost as Shares Drop 7 Percent

Folksam Divests Tesla Shares Over
2 MIN READ

Folksam Divests Tesla Shares Over Swedish Labor Dispute

Trump Set to Announce New
2 MIN READ

Trump Set to Announce New Tariffs as Global Markets Brace

Stockholm Stock Exchange Faces Decline
1 MIN READ

Stockholm Stock Exchange Faces Decline as Futures Point Downward

Trump's Tariffs Predicted to Slow
1 MIN READ

Trump's Tariffs Predicted to Slow Global Economy Growth

Construction Sector Sees Modest Growth
1 MIN READ

Construction Sector Sees Modest Growth with Housing and Government Boost

Asian Markets Show Mixed Reactions
1 MIN READ

Asian Markets Show Mixed Reactions Ahead of Trump's Tariff News

Motorhome Registrations Surge 59 Percent
1 MIN READ

Motorhome Registrations Surge 59 Percent in 2025

Wall Street Closes Mostly Up
1 MIN READ

Wall Street Closes Mostly Up After Volatile Day

Swedish Paper Industry Secures Two-Year
1 MIN READ

Swedish Paper Industry Secures Two-Year Wage Agreement

Trump's New Tariffs on Imports
1 MIN READ

Trump's New Tariffs on Imports Set to Take Effect Today

Sweden to Acquire C-390 Transport
1 MIN READ

Sweden to Acquire C-390 Transport Aircraft in Joint Deal with EU Partners

Finland Shuts Down Last Coal
1 MIN READ

Finland Shuts Down Last Coal Plant, Slashing Emissions by 50 Percent

Volvo and Major Automakers Fined
1 MIN READ

Volvo and Major Automakers Fined 458 Million Euros for Cartel Involvement