Because mortgages are more expensive and harder to get? The Bank of Italy explains it with two different analyses. The publication "Banks and money: national series" revealed the jump in mortgage rates which rose to 2,37% in June from 2,27% over the previous month, while those on new consumer credit disbursements stood at 8,34% (8,25% in May). The second is the update of the quarterly report on the housing market, carried out among 1.465 brokerage agencies, which shows not only that demand is lively and prices holding up but also that 23,9% of the agencies report difficulties on the part of potential buyers get home loans for rising rates.
Real estate market: demand holds but sales are blocked
In Italy, relating to the second quarter of 2022, the investigation conducted at real estate agents, exhibition prices stable, with a balance between upward and downward judgments slightly up on the previous survey. Even if demand is still high, at the same time, the number of operators who have sold at least one property has decreased and the negative balance between the judgments of increase and reduction in the number of potential buyers has widened.
For about half of the agents, the trading they crash due to miss price agreement between sellers and buyers. The former consider the offers too low and the latter the sums requested too high. The difficulty in obtaining a mortgage on the part of buyers also weighs: the share of operators reporting this difficulty has increased by about 5 percentage points compared to the previous survey (to 23,9 per cent).
Mortgage rates rise, bad debts fall for banks
In more detail, the interest rates on new loans to non-financial companies, Bankitalia specified, were equal to 1,44% (1,19% in the previous month), those for amounts up to 1 million euro at 1,97 .1,15%, while the rates on new loans for amounts exceeding this threshold at 0,31%. Finally, the borrowing rates on all outstanding deposits were equal to XNUMX% as in the previous month.
From the publication “Banks and Money: National Series” of the Bank of Italy it also emerged that loans to the private sector grew by 3,2% over twelve months (3,1% in May), while the growth in loans to households was 4,1% from 4% in the previous month and those to non-financial companies by 2,6 (against 2,3% in the previous month). Private sector deposits grew by 3% over twelve months (against 4,6 in May); bond funding decreased by 7,1% over the same period of the previous year (-8 in May).
Home loans, rate comparison
However, the Palazzo Koch data must be interpreted without distinguishing between operations a fixed rate and variable rate. Fixed-rate loans are less popular (currently they represent just over half of the market while at the beginning of the year they were over 90%), today offered just under 3%. On the contrary, applications for variable-rate mortgages increased, which since the beginning of the year have increased on average by half a percentage point, still standing at around 1,5%, despite all the uncertainties linked to geopolitical tensions and the rise in inflation.
However, the problem with the variable mortgage is that if the value of theEuribor – the benchmark that measures the cost of money short and which, although not strictly linked to the decisions of the ECB, ends up transposing them – if the cost of the loan rose in the short term, it would skyrocket.
The gap between fixed and floating could narrow in the coming weeks based on the new conditions that banks will propose starting September XNUMXst (rates are usually updated at the beginning of the month).
Ultimately, after the fixed rate had the lion's share for a couple of years, now the trend seems to be reversing. But whether the era of gods is fixed or variable rates at historic lows it has set.
House prices to grow in the next three years: +12% in Milan, +9% in Rome
House prices in Italy will continue to increase over the next three years, especially in large cities: +12% a Milano and +9% a Roma. This is the scenario prefigured by Nomisma for the residential market between now and the end of 2024. There are slight downward corrections compared to the forecasts made at the beginning of the year, but the war, inflation and the risk of a recession so far they have had a smaller impact than expected and the explanation given by the research center is the housing demand at historic highs, but the mix between price increases and rate increases cuts the weaker range of potential buyers out of the market.
Home loans: higher rates penalize young people
I mortgages for under 36s they are no longer sustainable for the banks. So much so that in June, they suspended the offer of subsidized fixed-rate mortgages guaranteed by the First home guarantee fund precisely because of the surge in the IRS that began at the beginning of the year. This is the reference rate for fixed rates - for example, the 20-year rate went from 0,38% in December 2021 to an average of 1,84% in June - exceeding the limit thresholds indicated every 3 months by the Bank of Italy , consequently preventing credit institutions from continuing with offers at subsidized rates.
All this has resulted in a U-turn mortgage applications by the group of young people under 36 who have driven the mortgage sector in recent months with a share of more than 30% of the total.
