Mortgage demand tumbles: -15%
Bad news for economy are coming from European Central Bank monthly bulletin. In the third quarter, mortgage demand marks a -15%, that comes after the -22% of the previous quarter.
These data can be partially explained with interest rate rise (now they MRO rate has reached 4%), but ECB itself admits that there is another, maybe worrying, reason. Banks got their fingers burnt with subprime mortgages and now, besides being very careful on lending money, they also do not ecourage potential borrowers. This also mean higher interest rates, to compensate an higher perceived risk.
This may not be a short lived trend: expectations are that in the next quarter banks will continue to tighten up access to lending. In this case, there will be consequences on the economy: at first in the housing market, but it’s probable a negative impact on consumer confidence, that could turn down overall economy.
Original post (in Italian): Continua a crollare la richiesta di mutui: -15%
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