Mortgages, falling rates but few loans: families reluctant to get into debt, Bank of Italy analysis

The (almost) right price at the (for now) wrong time. The timing – which improves but remains unfavorable – is that of the houses, so according to the latest statistical data contained in the “Bank and money” report by Bank of Italy asking families for a mortgage today would cost less, with rates at 4.09% in April compared to 4.21% in March, but the request for loans remains low, down by 1.2% over 12 months.

The general trend

The data, released on a monthly basis, relate to the month of April and take into consideration bank interest rates on deposits and loans also for businesses. Rates are lowered to 4.09% for families and rising for businesses, to 5.7% for small ones. In parallel, loans to the private sector, adjusted on the basis of the harmonized methodology agreed within the European System of Central Banks (ESCB), decreased by 2.2% over 12 months. A figure that is a slight improvement compared to March (-2.4) but which concerns both families and businesses, which do not seem to have the strength to go into debt.

Rates for families are falling

Also considering the APR including ancillary expenses, in April families benefited from rates on new mortgages at 4.09% compared to 4.21% in the previous month. The reduction also concerns consumer credit itself, for which the APR on new disbursements was 10.59% in April compared to 10.61% in March. Although these numbers are favourable, loans to households decreased by 1.2% over 12 months, although the figure is up slightly compared to the 1.4 of the previous month. According to a report by the Italian Federation of Business Brokers and Agents (Fimaa), in reality Italian families have started planning to purchase a house again, trusting in a drop in rates, and in 2024 around 710 thousand real estate sales will take place. However, for the moment the market is struggling to recover.

Business rates are increasing

According to «Bank and Money», in April the rates on new loans granted to businesses grew to 5.3% in April compared to 5.26% in the previous month. The steepest increases were recorded on loans to small businesses, equal to 5.7%. Large companies, on the other hand, are able to access better conditions, placing themselves on the threshold of 5.04%. Despite this, non-financial companies asked for less money to borrow: 3.4% less over 12 months, still a positive figure compared to March (-3.9).

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