(Bloomberg) -- Swedish household expectations on housing prices fell for a third straight month as economic data show growth stagnating and unemployment rising in the Nordic country. 

SEB AB’s housing price indicator fell 4 points to 0 in November, indicating a split between those that expect to see rising home prices versus those that see levels falling. The reading comes as 18 months of mounting borrowing costs are taking a toll on an economy that has previously proven surprisingly resilient.  

“It’s a dead heat between households that believe in rising and falling housing prices, reflecting how divided the housing market is at the moment,” SEB economist Américo Fernández said in a statement. 

After stabilizing this year, prices of homes are currently undecided, with many forecasters anticipating that a 2022 rout that turned Sweden into an epitome of the global housing turmoil will resume. Bloomberg economist Selva Bahar Baziki belongs to the camp that believes the situation is likely to get worse before it gets better.

“Our model shows that house prices in the third quarter of 2023 were in line with levels suggested by fundamentals,” Baziki said. “But that does not mean the fall is over – we expect prices to tumble by about 8% to a trough in 2Q24.”

Read More: Swedish Housing Prices Falter After Period of Stabilization

While borrowing costs are approaching a peak globally, the Swedish central bank has indicated that it might take one step further in its tightening campaign later this month, as it is struggling with stubborn price increases on services and a weak currency that makes imported goods more expensive. 

Households in the SEB survey — comprising 1,000 interviews during Oct. 31 to Nov. 7 — said Sweden’s key interest rate will be at 4.39% in one year’s time, unchanged from the previous month’s survey. 

“The Riksbank’s next interest rate announcement will likely determine which direction households’ home price expectations will take in the near future,” Fernández said.

(Adds chart and comment from Bloomberg economist.)

©2023 Bloomberg L.P.