Swedish mortgage lending falls for first time as rates rise

MORTGAGE lending to Swedish households declined on month for the first time on record in February, as rates on home loans rise and the country’s housing market remains sluggish.

The value of new mortgages declined by 274 million Swedish kronor (S$35.1 million) from the previous month, according to data from Statistics Sweden, which provides figures dating back to 2001. Total lending to households grew 2.8 per cent on year in February, marking the 10th straight month of slowing credit growth.

The data shows how Sweden’s faltering housing market is affecting lending to households. In a move that has become emblematic of a global development, Swedish home prices lost about 15 per cent of their value from a peak in February last year.

While some signs of stabilisation have been reported in recent months, most economists expect prices to fall further as mortgage rates keep rising after reaching the highest level in 11 years in February, according to Statistics Sweden.

Data published Monday by real-estate listing site Booli also shows that housing supply remains elevated and ads remain on the site about twice as long as has been the norm in recent years. BLOOMBERG