Summary
- Following a dizzying rally during the Covid recovery, global housing markets have cooled recently as affordability has declined.
- In Sweden, the combination of mostly floating mortgages, uncomfortably high inflation, and a central bank behind the curve but determined to catch up (last policy change was a 100 bps hike) means that house prices have already declined materially.
- Policymakers in high beta markets, where households are also most levered, will have to be extra vigilant with feedback from the housing market into the overall economy and financial stability.
For further details see:
Housing Is Starting To Impact Monetary Policy