the increase in interest rates led to a decrease in the number of loans granted in 2022

Almost a 20% drop: Mortgage loan production will drop by exactly -19.9% ​​in 2022, according to a study published by the Crédit Logement/CSA Observatory on January 17. As for the number of loans granted, it suffered a very similar regression, decreasing by -20.5% compared to the previous year.

“Such a decline has not been observed since the fall of 2008, at the peak of the international financial crisis from the United States. This is more prominent than what was observed during the first arrest.” A reference in the sector that draws attention to the authors of this work.

The figures are far from the Banque de France

A far cry from figures from the Banque de France, which said in early January that new credit production (excluding renegotiations) would be €218 billion in 2022, down just 3% from 2021.

Real estate lending: 2022 will be a record year, according to Banque de France

This degradation is in any case a “exceptional character” Until 2022, explains Michel Mouillart, professor of economics, responsible for presenting the results of the study. partially closed “Consecutive Increases” ECB’s main refinancing rate in mid-September, early November and, to a lesser extent, on December 21.

Attrition rate is also to blame

This fall is also inherited from the insufficient revaluation of the depreciation rate on October 1. This rate covers all costs of the home loan (loan rate charged by the bank, any brokerage commission, borrower’s insurance). For months, some real estate players have accused him of blocking access to credit for certain households. “Credit supply has not recovered enough, unlike what is usually observed in early autumn,” analyze the authors.

Still, mortgage specialists got the green light from the Banque de France last week for a temporary interest rate reform. Now it will be updated monthly instead of quarterly. This interest has also been raised to 3.57% for mortgages over 20 years from January 1. The idea behind this measure is to allow banks to raise mortgage rates faster and better adapt to refinancing conditions.

An announcement supported by Bercy, who is concerned about a market slowdown that has been observed since September but appears to have accelerated in recent weeks. “The interest rate exists to protect the borrower, but it should not be an instrument for the lending rate,” A source close to Bersi said.

However, the decision to change the rules should be made by the Governor of the Bank de France rather than the Minister of Economy.

Banque de France releases the mortgage by changing the calculation of the depreciation rate

Increasing rate and acceptance

It also comes from the Crédit Logement/CSA Observatory that the average rate of loans issued by the private sector was 2.22% in the fourth quarter of 2022. 1.17%).

In October, it exceeded 2% for the first time in seven years and reached 2.05%. We have to go back to 2016 to see a comparable rate of up to 2.07%.

As of December 2022, new home loans have a term of approximately 21 years (248 months). In general, 65.2% of bank loans for buying a house were granted for a period of 20-25 years, while last year this indicator was 55.2%.

Finally, the personal contribution required for the purchase of real estate continues to increase, but less strongly than in 2021 (+13.2% vs. +12.3%). It has increased by 43.5% over four years, which corresponds to an additional contribution of 7 months for households with an income of no more than three times the minimum wage, at least five times more than 1.5 months. .

Legacy real estate prices: market should ‘settle down’ in 2023 after ‘clear turnaround’

A decrease in the number of overdue debt files in 2022, despite the increase in security

In 2022, the number of overdue debt files fell by 7% compared to 2021, the Banque de France announced on Tuesday: So, 113,081 overdue debt files were submitted, compared to 120,975 in 2021. 2019. And since peaking in 2014, the number of overdue debt filings has halved.

Despite this, registrations in the national file of loan repayment incidents, which lists individuals who have difficulty repaying the loan taken out individually, as well as those who are in a situation of excessive debt, increased by 18% between 2021 and 2022. , to return to 2019 levels. According to Banque de France Director of Individuals Mark Begeri, this “normalization”, The appearance of the early spring of 2022 can be explained by the end of certain flexibility of banks that dates back to the beginning of the Covid-19 pandemic in France.

On the other hand, this is not to say that everything is fine. Mark Beguery indeed points out that associations are very demanding with emergency and especially food requirements. They are people “those with budgetary difficulties not related to debt problems (…)”, explains.

This situation differs in any case from the crisis of 2008, which resulted in an increase in debt. According to Mark Begeri, one explanation may be that the unemployment rate has remained low for the time being, in contrast to the increase seen since 2008.

(via AFP)