Mortgages, applications are down but the average amount soars to record levels

The mortgage market is dealing with the rise in interest rates and with the uncertainty that weighs on the current situation and which pushes households to postpone their choices. If 2022 marked the year of the restart, with the recovery of demand suppressed during the pandemic, analyzing the requests for real estate mortgages by Italian families, overall in the 12 months there is a contraction of 22.7% compared to 2021 .

On the other hand, the level of the average amount requested is rising, which in 2022 reached the record figure of the last 10 years with a volume of 144,458 Euros, up by +3.8% compared to the previous year. This is what emerges from the latest Crif data, according to which the slowdown in mortgage applications reflects the now structural component of the contraction of subrogations, to which must be added the increase in interest rates which have caused the installments to rise, further eroding spending capacity of families. «In recent months, the demand for new mortgages has been penalized mainly by two factors: increased interest rates and less willingness of households to resort to credit due to the climate of uncertainty on the geopolitical and macroeconomic front. Furthermore, the temporary disappearance of the offer of subsidized mortgages with Consap guarantee to the under 36s, which have become economically no longer sustainable due to the offer, certainly had an influence. However, many government incentives have been confirmed for 2023, in particular those aimed at young people, building renovation and energy saving. To be considered as real antidotes for the entire sector» comments Simone Capecchi, Executive Director of Crif.

Going into detail on the phenomenon of subrogations, in the observation period of the first nine months of 2022, we note that they suffered a drop of 58.2%, while new mortgages disbursed remained almost stable, with a modest contraction of 1.1 %. Compared to the average amount, Crif underlines that the growth trend began – albeit with fluctuations and discontinuities – in 2016, after a long recession but, above all, in the downsizing of subrogation contracts, which by nature have a value decidedly lower than that of purchase loans. Consequently, almost 3/4 of the requests have an average amount of less than 150,000 euros, in line with the value recorded in 2022. Confirming the trend of families to move towards long-term solutions so as not to weigh too much on the family budget, in 2022 almost 85% of mortgage applications were characterized by a duration of more than 15 years. This trend has further accentuated compared to the past, with an expansion of repayment plans which led to an increase of 8.6 percentage points for the 25-30 year bracket compared to 2021. Analyzing the distribution of mortgage applications in relation to the age of the applicant, the under 35 bracket is confirmed as a real catalyst for demand volumes, with 35.6% of the total (increase of 5.1 pp compared to 2021). Among the drivers that have had a positive effect on the trend in demand, the incentives for young mortgages, renovations and, above all, green mortgages for energy efficiency of the home should certainly be mentioned.