In its usual monthly bulletin, the ABI certifies how household loan volumes and mortgage rates grew - albeit slightly - at the beginning of the year. This figure is certainly not unexpected, confirming the presumably prolonged positive outlook on the evolution of the real estate-related credit market, and which could find a natural evolution in the coming months as well, barring halting brackets on this sustainable path.
Mortgage market grows
Going in order, let us first note how as of January 31, 2019, the volume of loans disbursed by banks to households and businesses grew by 1 percent. This is an estimate conducted on data from Bankitalia, and it is accompanied by an even more remarkable acceleration with regard to the mortgage market: here the data are updated only in December, but a positive development of 2.5 percent on an annual basis can still be reiterated with regard to the total amount of home loans outstanding from tricolor households.
Rising rates for households and businesses
As a side note, however, note how the dynamic increase in the volume of loans is also accompanied by a concomitant progression in the average rates applied to new loan transactions to households and businesses.
As for the former, in fact, the average rate on new home purchase transactions grew to 1.92 percent, up from 1.89 percent in December 2018 and up from 5.72 percent at the end of 2007. On the other hand, as for the latter, the average rate on new business financing transactions was 1.52 percent, up from 1.46 percent in the previous month and up from 5.48 percent at the end of 2007.
It also emerges that the average rate found on loan transactions is 2.59 percent, up from 2.55 percent in the previous month and 6.19 percent reached at the dawn of the long credit crisis in late 2007.
Home mortgage rates, reversal on the horizon?
In this dossier, it is of particular interest to understand how interest rates on home mortgages are evolving. While it is in fact true that we are oriented within a context strongly characterized by a level of the cost of money at historic lows, it is also true that the average rate on new home purchase transactions is now 13 basis points higher than what was touched at the July 2018 low, and how the current rate found in the ABI bulletin is the highest value since January 2018.
It is evidently too early to say whether or not we are facing the start of a steady path of rising borrowing costs, or whether we are instead facing some physiological adjustment within a window of prolonged stability. Much, probably, will be understood with the first projections of the spring and summer of 2019, with the understanding that it is believed that the cost of money will remain low still throughout 2019 and, certainly, for a good part of 2020, becoming an element of further attractiveness for those who are thinking of taking on debt for the fulfillment of transactions of a real estate nature.
