Interest rates on mortgages continue to increase: in October they rose to 4.72%, including ancillary costs (annual effective rate or APR), from 4.65% in September, according to the latest data from the Bank of Italy published yesterday. The APR on new consumer credit disbursements, however, fell slightly to 10.46% from 10.52 in the previous month. It is a new record and we have to go back to January 2009, in the midst of the great global financial crisis to find a higher APR, then equal to 4.91 (4.9077), claims the National Consumers Union, recalling that compared to October 2022 , the increase is 1.49 percentage points and 2.93% over October 2021.
The increase in interest on mortgages weighs heavily on those who have chosen a variable rate loan to buy a house: almost 200 thousand families have failed to repay one or more installments in the last year, according to a survey commissioned by Facile. it. The rapid increase in interest rates, which the ECB brought from zero to 4.5% to stop inflation, which reached a peak of 10.6% on average in the euro area, caused a sharp increase in the cost of mortgages . From January 2022 to today, installments have grown by up to 65%, with an overall burden of over 3,100 euros, calculates the Facile.it survey, noting that, among those with a variable rate mortgage, almost one in two declared which could have serious problems with payments if the installments remain at these levels for a long time.
All eyes are on the central banks. After the pause in the ECB’s tightening in the last monetary policy meeting at the end of October, inflation in November surprisingly fell more than expected, to 2.4% in the euro area, according to the preliminary estimate. In its September forecasts, the ECB indicates inflation at 3.2% for the whole of 2024, only to see it fall to 2.1% in 2025. As if the monetary tightening had been more deflationary than expected. This is why many are now betting on a rate cut that could arrive sooner than the president of the ECB, Christine Lagarde, is willing to admit. Maybe already next March. Therefore tomorrow, on the occasion of the last monetary policy meeting of the year, if a new pause on rates is a given, investors will listen carefully to Lagarde’s words during the traditional press conference.
Today it will instead be the Federal Reserve’s turn. Despite ten consecutive rate increases, which rose to 5.25-5.5% in the United States, American GDP grew by 5.2% in the third quarter, while the price trend is slowing down, with the index down from 3.2 to 3.1% in November. A figure that pushed Treasury Secretary Janet Yellen to speak of “a soft landing”, meaning that “the economy continues to grow, the job market remains strong and inflation falls”. The Fed is therefore expected to keep rates unchanged for the third consecutive meeting, trying to understand from the words of President Jerome Powell the timing of an upcoming rate cut also on the other side of the Atlantic.
2023-12-12 20:58:48
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