(Finance) – “The contraction in the number of real estate sales, -16% in the second quarter of 2023, combined with less recourse to mortgages for the purchase of their homes by individuals and families, -20% in the second quarter of 2023, significantly slow down the disbursement of new mortgages: -33.3% in the second quarter of 2023 and -29.9% in the first half of the year. During the third quarter of 2023, the growth of the Euribor reference indices which began at the beginning of 2022 is accompanied by a significant increase in the IRS indices, an increase which reduces the interest in subrogation mortgages which in the third quarter account for 27% of the requests on the online channel compared to 36% in the first quarter”. This is what emerges from the CRIF Mortgage Compass – MutuiSupermarket.it updated to the third quarter of 2023.
Also during the third quarter of 2023, the 3-month Euribor index grows significantly, going from an average value of 3.54% in June to an average 3.88% in September. At the same time, the 20-year IRS index over the same period grows from an average value of 2.90% to 3.19%, further accelerating growth following the increase in the cost of money decided by the ECB in September and reaching values in mid-October above 3.4%.
Despite the recorded increases in IRS indices, fixed rate mortgages continue to have lower rates than their variable rate mortgage counterparts. This helps to confirm also in the third quarter of 2023 the complete polarization of the demand for new mortgages on the choice of the fixed rate mortgage which continues to explain around 96% of consumer preferences, consistently with what has already been observed in the first two quarters of the year.
Going into detail, the increase in popularity recorded for fixed rate mortgages over the last few quarters is determined by new mortgage offers that feature more advantageous fixed rates compared to comparable variable rate mortgages, of almost 0.9% – 1 % for the different durations proposed from 10 to 30 years.
The strong increase in the 3-month Euribor – an increase of 4.44% over the period January 2022 – September 2023 – generated a significant increase in the amount of the installment for subscribers of variable rate mortgages. The progressively higher installment has contributed to the strong recovery of the rate since the third quarter of 2022 mortgage application for subrogation purposes. Demand suffered a further slowdown in the third quarter of 2023, accounting for 27% of the total requests on the online channel compared to 32% recorded in the second quarter of 2023 and 36% in the first quarter of 2023. In the event of further increases decided from the ECB over the next few months, in any case a recovery in demand for subrogation cannot be ruled out, driven by borrowers with variable rate contracts who wish to protect themselves from new installment increases by resorting to convenient fixed rate mortgage solutions.
As regards the trades, these go down to -16% compared to the corresponding quarter of 2022, marking the worst result recorded since the second quarter of 2020when the country was stuck due to the lockdown due to the outbreak of the covid-19 pandemic.