Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244531 
Year of Publication: 
2017
Series/Report no.: 
Working Paper No. 9/2017
Publisher: 
Örebro University School of Business, Örebro
Abstract: 
Household expectations of future mortgage rates elicited over the last few years might appear unrealistically low. However, taking explicit account of the high persistence in interest rates, we find that Swedish households' implied long-term expectation of mortgage rates is around 4.7 percent. This number lines up well with the long-term expectation that can be deduced from the Riksbank's assessment of the repo rate in the long run and the typical spread between the mortgage rate and the repo rate. Our analysis makes use of household mortgage rate expectations at three different horizons, which enables an explicit modelling of the "term-structure" of household forecasts.
Subjects: 
Survey data
Household expectations
Mortgage rates
JEL: 
E40
G21
Document Type: 
Working Paper

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