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Unlike countries such as the UK, a significant portion of Swedish homeowners possess floating mortgages which react quickly to interest rate changes. By 2023, approximately 40% of mortgages in Sweden had interest rates fixed for three months or less, leading to increased mortgage costs during a period of rising interest rates. Consequently, many potential homebuyers hesitated to enter an expensive market, causing a slump in housing sales. Additionally, the growing mortgage costs reduced disposable incomes for many Swedish households, further dampening consumer confidence which likely contributed to the overall contraction in GDP and a rise in unemployment rates, which hovered between 7% and 10% during the economic downturn.