Falling Housing Prices: No Rebound in Sight

Housing prices continued to decline in June. No turnaround is visible—quite the opposite, according to SBAB's chief economist Robert Boije.

"I think we might need to revise our housing price forecast downward for this year," he told TT.

Housing prices fell by 0.9% nationwide in June, according to the state bank SBAB and the real estate site Booli's price index.

Traditionally, there is also a decline in June, but even after adjusting for seasonal effects, a 0.2% drop is noted, which is slightly more than usual, states SBAB's chief economist Robert Boije.

A clearly negative trend has also been observed during the spring, he points out.

"It's not a celebration; looking at trend values, they have been negative all spring, despite significantly lower mortgage rates than at the same time last year," he says.

Trump’s Influence

Global factors such as US President Donald Trump's tariff announcements and geopolitical tensions in the Middle East are possible reasons for the cautious development in the housing market, believes Robert Boije.

"People become a bit more cautious about making big decisions and how much they are willing to pay," he says about hesitant buyers.

This may also partly explain why the villa market was significantly pressured in June, especially in Greater Stockholm, where the decline was as much as 3.2%.

"We know that villa prices are highest in Stockholm, and perhaps global concerns leave their clearest marks where prices are highest," speculates Boije.

SBAB's latest market forecast predicted a 3% rise in housing prices by 2025. However, Robert Boije does not agree with the thesis that prices have bottomed out. This is based on seasonal patterns observed in the housing market and the fact that longer fixed mortgage rates have not moved downward.

"These are especially important for housing prices. I would rather conclude that we might need to revise our housing price forecast even more than we have done."

More Cuts Needed

The Riksbank's announcement of an interest rate cut in June needs to be followed by further cuts to boost the market, Boije assesses.

What else is needed to boost the housing market?

"Let's say Trump stops with tariffs and the global environment becomes calmer; these could be positive factors."