Slowly, but something is moving. The mortgage market has restarted, after the darkness of recent years. A single rate cut by the ECB, in June, was enough to stir things up. And the forecast of a second cut in September, after the July break, is pushing families to start taking out loans again.
According to the Crif Barometer, mortgage requests in the first half of 2024 grew by 3.4% compared to the same period in 2023. Looking at June, there was a +5.8%. Average amounts also increased, with a tepid +1% (+3% for June) which gives confidence to the market. Almost 4 out of 10 requests for new mortgages come from citizens between 25 and 30 years old and 8 out of 10 loans are long-term solutions, longer than 15 years. The push comes largely from surrogations (+6.4% in the first three months of the year), increasingly requested for convenience and now accounting for a third of new requests. Indeed, there was a 52% increase compared to 2023. Because it is true that with the ECB rate cut, the mortgage rate also fell, but the variable rate remains at 5.04% in June against 3.26% of the fixed rate (Osservatorio MutuiOnline). So the transition (the surrogation) for many is the choice made to not bet on the future and have a lower rate today.
Will there be new steps from Frankfurt in September? Everything suggests so, but in the meantime 98.9% of borrowers have chosen the fixed rate this year. In January 2024, a variable rate mortgage for 120 thousand euros over thirty years meant an installment of 619 euros (4.66% rate). Today (MutuiOnline simulation) the installment has dropped to 605 euros (4.46%). And if the ECB really cuts rates by the end of the year by another 50 points, that installment will reach 570 euros (4% rate). But, 3% of the fixed rate still means 487 euros per month. The variable rate would therefore not be so competitive yet.
The market, therefore, is getting going again, even if a survey by Bankitalia tells us that banks’ expectations are still weak in the first half of the year, also due to the increased prices of sales. But that +3.4% detected by Crif is indicative of a recovery, which is also green. Green mortgages have in fact gone from occupying 2.5-5% of the market in 2023 to over 15% in the first half of 2024.
So now, with rates stuck at the June decision. Will the situation change in September? It depends on the trend of inflation (the 2% beacon is still there), energy prices and the dynamics of wages (in Italy they grew by 3.1% in the semester, after years of stagnation). The decision in Frankfurt on September 12th. And at that point the mortgage market will respond.
