The Random Spaniard has suggested that our indexing, rather than providing the raw figures, of the new mortgage stats from the INE might detract from their utility. We think this is a legitimate criticism and would like to explain.Simply, the new mortgage data does not tell us much about either the number of house sales or the prices for which they change hands. So we don't think it's more important than the goal of saving us the trouble of putting three separate graphs to merely illustrate trend in mortgage lending. Mortgages are merely loans guaranteed by a property. That they happen to be, in the case of a home purchase, guaranteed by the property being bought is incidental. The fact that the number of home mortgages granted in a given month consistently outnumbers residential sales by between 140 and 175% - averaging out to 155% - should be evidence of this.
The second chart shows this ratio. Interesting the huge bump in 2009, possibly indicating that any relaxing of credit conditions, or renewed demand for credit, was accompanied by more rigorous collateral requirements on the part of banks. Other suggestions accepted in the comments box.-------------------------------------
3 Comments:
Are you sure that the ratio bump might not just be due to a misalignment of reporting dates?
In the US I would have assumed it was due to re-financing spurred on by the better rates. A mortgage is granted, but no sale is transacted.
A second explanation may be the practice of a first and second mortgage on one property at the time of sale.
Thanks for commenting.
These are definitely totally new mortgages. They separate them out in the stats.
Post a Comment