Norwegian home prices rose for the first time in three months, backing the Nordic housing market’s reputation of being resilient to rising credit costs and stubborn inflation.

Prices rose a seasonally-adjusted 0.2 per cent on the month in July, after revised declines of 0.4 per cent and 0.2 per cent in June and May, respectively, according to data published by Real Estate Norway on Thursday (Aug 3).

The central bank had forecast no change in its latest monetary policy report in June.

Norway’s housing market has outperformed its Scandinavian peers in the current downturn, helped by an easing of mortgage lending rules by the government late last year and a shortage of supply in around the capital.

The data could boost speculation that policymakers may opt to raise rates by another half-point later this month rather than a quarter of a percentage point, even as a recent strengthening of the krone has reduced the probability of a larger move. 

With prices down about 0.8 per cent from their peak last August, the development stands out compared with double-digit declines in Sweden and Denmark.

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Norges Bank said in June that it expects home prices in the fossil-fuel-rich nation to gain 0.3 per cent this year, compared with a decline projected in March. BLOOMBERG