2023-04-27 07:54:29
Las interest rate hikes approved by the European Central Bank (ECB) in recent months to contain inflation begin to be reliably transferred to the mortgage market. The average interest on loans to buy a home signed in February rose to 2.86%, compared to the 1.76% that it marked in the same month of 2022according to data published yesterday by the National Statistics Institute (INE).
Furthermore, the advance in the cost of mortgages does not seem to stop in February. As he assures CEO of Idealista/Mortgages, Juan Villén“it is true that the cost of new mortgages has become more expensive in recent months, but it is still It is possible to find fixed and mixed operations below the Euribor, so we may see new increases for this reason in the coming months“.
Ferran Font, director of Estudios de pisos.comis also one of those who think that this year will be marked by the increase in mortgage prices, which will slow down the number of operations. In February, in fact, the home purchase loan firm fell 2% year-on-year after it had recovered from the fall in December in January, when it also fell 8% compared to the same month in 2022.
The hope that remains for those who are going to sign a mortgage in the coming months is that the ECB slows down the rate of interest rate rises and this ends up being transferred to the mortgage market. Because the increases, at a greater or lesser speed, seem guaranteed. Core inflation (that which excludes energy and unprocessed food) set a new record and stood at 5.7% in March in the euro area. A reality that puts pressure on the ECB again, which seems destined to continue raising interest rates until reaching the objective of inflation standing at 2%. At its last meeting in March, the monetary entity already decided to comply with the planned script and increased rates again by 0.5% to place them at 3.5% despite the banking turmoil due to the bankruptcy of Silicon Valley Bank (SVB ) and Credit Suisse.
Now, it seems that things will not be very different either. “If the baseline scenario underlying the March ECB staff macroeconomic projections persists, raising rates further will be more appropriate,” ECB chief economist Philip Lane warned in the middle of this month. It will be necessary to see, in any case, how far the outbreak of the financial crisis in the United States. The First Republic Bank fell in the trading session on Tuesday plummeting on Wall Street, more than 50%. And yesterday an additional 30% was left after the market learned that during the March crisis that took down the SVB and Credit Suisse it lost more than 100,000 million dollars in deposits and despite having received a bailout of about 30,000 million a group of American financial entities. Now, the entity would be evaluating the sale of assets valued between 50,000 and 100,000 million dollars (45,397 and 90,795 million euros) to strengthen its balance sheet, according to Bloomberg reports.
Mortgages are not only beginning to reflect increases in the official price of money in their cost, but also the effect it has had on the supply of loans. The ECB rate hikes have led to the Euribor turning around a little over a year ago and entering positive territory. A change that motivated financial institutions to begin to improve their variable mortgage offers to take advantage of this increase and to make it more expensive, if not directly, to eliminate the fixed mortgages that they had used when the Euribor was in negative territory to protect their profit margins. In February, 34.3% of home mortgages were made at a variable rate, while 65.7% were signed at a fixed rateten points less than in July 2022, when a maximum of 75,4%which includes the slow but progressive decline of these products.
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