The development can be explained by record high net lending and unusually large net holding gains in three out of four years in the period. The net holding gains were calculated to NOK 184 billion in 2023, which is mainly due to markets price developments in the securities markets. Net lending was calculated to NOK 90 billion.
The financial investments amounted to NOK 250 billion, which is NOK 38 billion more than in 2022. The development reflects that households continued to accumulate financial reserves during the last year. The debt, on the other hand, developed moderately, with an increase of NOK 160 billion in 2023, which is slightly higher than the previous year. The debt growth over the last two years is estimated at 3.5 per cent per year.
The last year, cash and bank deposits increased by NOK 56 billion, which is roughly the same increase as in the years before the corona pandemic in 2020. However, the development in bank deposits was characterized by a significant portfolio shift. During the two last years, households have moved funds from transaction accounts to fixed deposit accounts with better interest terms. The portfolio shift is reflected by a large reduction in transaction deposits and a record-high increase in other deposits, of NOK 95 billion in 2023. The increase in other deposits contributed to maintain the growth in bank deposits in 2023.
Securities represent the second largest group of financial assets on the household balance sheet. Net investments in securities amounted to NOK 32 billion in 2023, which is an increase of NOK 15 billion from the previous year. It was particularly net acquisition of mutual fund shares that contributed to the development, with NOK 27 billion last year compared to NOK 7 billion in 2022.
Insurance technical reserves represent the largest group of financial asset on the balance sheet. In 2023, the transactions were calculated to NOK 137 billion, which contributed significantly to the increase in total financial investments. The transactions are mainly determined by the development in earned pension entitlements. The transactions in pension entitlements in 2023 is a preliminary estimate, and based on a less detailed input data, compared to calculations when final annual statistics are available. These transactions may be revised in updated versions of the financial accounts.
The seasonally adjusted debt-to-income ratio has stabilized, and the ratio fell towards the end of the four-year period. At the end of 2023, the debt-to-income ratio was calculated at 241.3 per cent of disposable income, down from 246.8 per cent at the end of 2022. The fall indicates that the debt burden is decreasing.
Households’ debt consists to a large degree of loans from banks and mortgage companies. The average interest rate on loans from the banking sector rose from 4.25 per cent to 5.80 per cent during 2023. Higher interest rates have significantly increased both households' interest expenditures and the interest burden.
The overall picture of the household sector in the financial accounts at the end of 2023 mirrors the average household’s asset and liabilities. This picture becomes more nuanced if the macro household is divided into groups by income and wealth. This detailed information is not incorporated in the present version of financial accounts for households.