Swedish home prices fall sequentially in January

Swedish home prices fell sequentially in January. On a seasonally adjusted basis, prices dropped 1.4 percent sequentially, whereas it remained more or less intact at 0.1 percent on a year-on-year basis. January is an intense month as real-estate business take off after the holidays. Even if home prices rose in January, the seasonally adjusted figures indicate a fall. The sequential print was below forecast of a rise of 1 percent.

In Stockholm, the price development was softer as prices dropped a bit in the month. Prices dropped 2.1 percent sequentially and fell 0.1 percent year-on-year. This was a larger fall than the projection of a fall of 0.5 percent sequentially.

Softer economic prospects might have impacted the households negatively. Nevertheless, the supply of homes and apartments have begun falling, especially in Stockholm, and the labor market is still quite solid. Moreover, mortgage rates are low, and the next rate hike is distant, noted Nordea Bank in a research report.

“So far, there is no strong reason for why house prices would fall now. Nevertheless, a deteriorating house market have negative consequences for the economy and we will continue to monitor the development closely”, added Nordea Bank.