Difficult times for homebuyers. The mortgage interest rate rises and Italian families begin to deal with higher costs. Figures in hand, the average home purchase rate increased to 3.53% in January 2023 from 3.01% in the previous month, following the latest decisions of the European Central Bank. The current figure is far from 5.72% at the end of 2007, according to figures provided by the ABI (Italian Banks Association), but it is starting to show its first impact with a slight slowdown in the real estate market.
ABI deputy general manager Gianfranco Torriero explains in detail that the average rate for home purchases has “returned to November 2013 values”, emphasizing that “housing demand is simply not functional”. rates applied, but above all to housing prices and disposable income.” For those with variable rates, monthly repayments increased by 24%.
In other words, while there are families who are worried about the increase in the installments to be paid, on the other hand there are those who are worried whether they will be able to get the mortgage. However, the performance of the real estate market is being watched closely to understand the development and prospects for further rate hikes. Currently, “with current mortgage rates, our network is reporting a slight slowdown in the decision-making process regarding the purchase of the property, as those who have to take a significantly secured mortgage are more cautious,” said Fabiana Megliola, head of the Tecnocasa group’s research office. “This is a necessary reflection that leads to a realignment of property types or areas that allows demand to be better defined and possibly complete sale and purchase with actual availability.”
Turning to the banking data, according to ABI’s monthly report, loans to households and businesses increased in January, while deposits decreased. In particular, loans increased by 1.3% compared to the previous year. As of December 2022, loans to businesses remained stable, while loans to households increased by 3.3%. Torriero dell’Abi adds that the loan dynamics “continue with a positive trend, albeit slowing down.” Total direct deposit dynamics (resident customer deposits and bonds) decreased by 0.9% YoY.
Again in January, deposits fell by 18.7 billion euros (-1% year-on-year), while medium and long-term funding through bonds increased slightly (+0.6%). Bank NPLs, which were 14.2 billion euros in December, decreased by about two billion (-12.4%) month-on-month and about one billion less than December 2021.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
