Housing Lab has updated its Bubble Index using data for 2026 Q1. The update indicates that Norwegian real house prices were overvalued by around 15 percent in 2026 Q1. After a prolonged period of sustained overvaluation, the trend is that the gap has begun to narrow.

The income squeeze (inflation outpacing income growth) pulls fundamental prices down, lower interest rates cushion the fall, and rising housing stock adds a marginal downward push.

Looking ahead, we expect interest rate developments to weigh on fundamental prices in the short run, while solid income growth, stagnant supply, and an eventual normalization of the policy rate will help close the gap. Overall, although prices remain somewhat above fundamentals at the national level, the overvaluation appears to be receding rather than building.

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).