A stable, well-functioning financial market for allA stable, well-functioning financial market for allThe Swedish Mortgage Market: Households need to have margins for an uncertain future
The conditions for household finances improved in 2024. As many as 8 out of 10 households chose a variable interest rate, which is a higher share than in previous years. But the economic development is uncertain. Households need to allow for continued high housing and living costs. These are some of the conclusions from this year’s report on the Swedish mortgage market.
After several years of high inflation and increasing interest levels, many households began to experience better financial conditions in 2024. The most visible improvement for households that have a mortgage was that the Riksbank started to make cuts to the policy rate.
Households still under pressure
In 2024, as households experienced slightly improved financial conditions, housing prices also increased. Households' total mortgages increased slightly faster at the end of the year. The average size of the new mortgage in the sample increased for the first time since 2021. Compared to in 2023, new mortgagors used a smaller portion of their disposable income on mortgages, but the costs for mortgages continue to be higher than during the period when interest rates were low.
"Households have been under heavy pressure the past few years. The situation has eased somewhat, but it is still tough for many households. It is still uncertain how the economy will develop going forward, and households need to allow for a continued high cost of living," says Director General Daniel Barr from FI.
Many new mortgagors chose a variable rate
The share of households with a variable interest rate increased by almost 15 percentage points compared to in 2023. The explanation behind this development is most likely expectations of how the interest rate will develop in the future. In 2024, household expectations increased that the variable mortgage rate would go down in the future according to, for example, the National Institute of Economic Research's Economic Tendency Survey.
Higher fees in many tenant-owners associations
The higher interest rates and the higher price level in general has increased costs for tenant-owner associations. In 2024, the average fee for members of tenant-owners association increased by approximately 5 per cent compared to the previous year and almost 15 per cent compared to in 2022. Tenant-owners associations' average loan per m2 was also higher in 2024. Cost pressure could continue to increase for many associations as prices increase in general and in cases where the association has had fixed-term loans that need to be renewed at a higher interest rate.
About the Swedish mortgage market report
In the Swedish mortgage market report, which is published once a year, FI analyses the development on the mortgage market using a sample of borrowers that recently took out a mortgage. The sample in this year's report includes all new mortgage agreements for which the mortgage was paid out during the periods 26 August–2 September 2024 and 23–30 September 2024.
