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Mortgage granting tightens in the third quarter of 2022, as it had not done since 2008, states the Bank of Spain in its publication: 'Survey on bank loans in Spain' in October 2022.
The tightening refers both to Spain and the Eurozone and is largely due to the increase in economic risk perceived by financial entities due to the poor outlook for the evolution of the economy, as well as the increase in financing costs and reduced access to funds. This has also led to a decline in the supply of mortgage loans, the most pronounced since 2008.
The increase in tightening in the general conditions for granting mortgage loans for home acquisition has been 25% so far this year. Resulting in an increase in rates.
In the third quarter, in addition to the reduction in the supply of mortgage loans, demand has decreased due to the increase in economic uncertainty that causes consumer distrust, as well as the increase in perceived risk and, to a lesser extent, the deterioration of borrower solvency. The percentage of denied mortgages has also increased due to the aforementioned.
Banks foresee that this situation will not improve and that in the fourth quarter both supply and demand will continue to contract.
