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.
