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Guaranteed Online Loan Approval For Bad Credit -Lookupmyip.Org Uncategorized The economy is affecting house prices more than the interest rate

The economy is affecting house prices more than the interest rate



There are a number of different factors that affect how house prices move. As far as the retail level is concerned, it may matter what reputation an area has, if certain stores are opened nearby or if new preschools are opened.

But at an overall level, the most important factors are interest rates and the business cycle. Which of these two weighs the most depends on how you look at the market.

Low-interest rates give more expensive house prices

Low-interest rates give more expensive house prices

Some would argue that it is the low-interest rates that have caused the rise in house prices in recent years. From this point of view, people take larger loans when interest rates are low because their monthly costs are not very large.

This presumably presupposes that the interest rate will remain at this low level in the future as these people will otherwise receive a significantly higher monthly cost if the interest rate goes up.

To “take the opportunity” to borrow a lot of money when the interest rate is low is thus very short-term. The only time this is true is if the loan is tied up at the same time it is paid off.

Those who can lend money to a house, fix it on the five-year interest rate and pay off the entire loan at this time can thus rightly “watch out” when the interest rate is low. However, it is extremely unusual to be able to pay off at this rate, which most people also realize.

The upswing brings higher house prices

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Others want to argue that it is not the interest rate situation in the first place that affects house prices but in the first instance what the economic situation is in Sweden.

In times when Sweden has had a boom, house prices have gone up. People feel secure in having jobs while wages increase. This security means that more people believe in an equally good financial future and dare to bid higher on the houses.

Those who pay a high price for their house in this situation reason that they have jobs and that the income is secured in the future.

Or a mix…

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As we already pointed out at the beginning of the article, there are several different factors that affect house prices. The interest rate is one and the business cycle is another.

In addition to these two, there are several others. Which of these weighs the most is there are many different opinions.

The only thing we can be sure of is that no one can be sure how prices will move in the future…

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