The credit offered by banks for the purchase of a home has not lost dynamism despite the high levels of inflation faced in the country. According to the Bank of Mexico (BdeM), in April the balance of the current portfolio of these loans stood at one billion 116 thousand 897 million pesos, an increase of 11.3 percent compared to the same month of the previous year.
Information from the central bank shows that this is the highest figure since records began.
The fact that interest rates on these loans remain below the threshold of 10 percent on average and that financial institutions remain in constant competition to place larger mortgages has allowed these financings to remain on the rise.
At the same time, non-payment continues to decline. The balance due in the same month stood at 33 thousand 175 million pesos, equivalent to 2.9 percent of the total current portfolio and which had a decrease of 9.9 percent.
According to a report by BBVA Mexico, the lower employment effects on households with higher income levels could explain part of the dynamism observed in this portfolio in recent months.
However, he pointed out, “the current scenario of higher interest rates could slow down the dynamism of the portfolio, by raising the cost of real estate as an investment alternative compared to other assets. However, given the improvement in the economic activity and employment indicators, the housing loan portfolio would not be expected to stop growing in the medium term”.
Breaking down the financing allocated to housing, the sector with the best dynamism is that of loans granted for middle-level and residential households, since the current balance was placed at one trillion 67 thousand 201 million pesos, an increase of 12.2 percent compared to April 2021.
Meanwhile, the overdue balance of this portfolio was placed at 30 thousand 516 million pesos, a decrease of 9.3 percent compared to the month of April of the previous year. With respect to the current balance, non-payment represents 2.8 percent.
“Although the increase in the cost of housing financing due to the increase in long-term interest rates could reduce the attractiveness of investing in real estate, the greater uncertainty in the financial markets could encourage investment in relatively less risky assets and promote the growth of this type of credit”, BBVA pointed out.