The details were less upbeat than the overall picture as sentiment was down in all but two regions and the only reason behind the increase was a large reversal in sentiment in the South to the highest level since before the global financial crisis.
Sentiment in the South is more volatile than in other regions, which argues for caution when interpreting results for a single month. Still, rising sentiment in the South would be in line with an improving housing market in Denmark. The earlier slump in Denmark is probably an important factor why sentiment in the South has lagged other regions.
The big picture is still bullish. The indicator remains near the record high level of 68 reached in March. Record low rates combined with a lack of macro prudential or other measures to rein in lending has been reflected in continued strong rises in housing prices, with an acceleration for especially flats. The indicator suggests that this development will continue. Meanwhile the pace of increase in household lending continues to trend higher.
No rush to fix rates
The share of households that plan to fix rates in 3 months increased to 5 per cent, from 4 per cent in May. There are still few signs that low yields are causing households to shift towards a larger share of fixed rates which probably reflects that households do not expect the Riksbank to start hiking rates anytime soon. Swedish households’ own repo rate expectations in a year’s time declined to 0.20 per cent from 0.28 per cent in May. Thus households still expect the repo rate to rise from current -0.25 per cent.