Housing Lab estimates that the Covid-19 crises and the ensuing interest rate reduction has brought Norwegian house prices back to equilibrium. As of 2020Q2, Norwegian house prices were overvalued by a little less than 1 percent. Housing Lab concludes that the Norwegian housing market is in equilibrium. Both fundamental prices and actual prices are indices, in which each index = 1 in 2000Q1.
About the index
Housing Lab estimates fundamental house prices for Norway and compare them to the evolution of actual house prices. Fundamental house prices are determined by real per capita income, real after tax interest rates, and the housing stock per capita. Our estimates of fundamental prices are updated and published on a quarterly basis. Due to lags in the construction of the National Accounts data used to estimate fundamental prices, our estimates lag by one quarter. The underlying methodology is based on published research and is documented in Anundsen (2019).