Sino-Singapore Jingwei Client, June 22nd-On June 22, Shanghai E-House Real Estate Research Institute released the latest issue of "LPR Mortgage Interest Rate Report". In June, the 5-year LPR of the national loan market was 4.65%, unchanged from May. According to the report, the LPR interest rate has not been lowered this time, but because it is at a historically low level, it still reflects a loose policy orientation.
National 5-year LPR monthly trend Picture source: E-House Research Institute
The report points out that from the historical data, the LPR interest rate has been announced in the first half of this year in six periods, which were revised down in February and April, respectively, reflecting the policy direction of interest rate cuts in the first half of this year. For commercial banks, driven by the three RRR cuts in the first half of this year, the enthusiasm for implementing interest rate reduction policies is increasing, which has a positive effect on guiding the reduction of medium and long-term loan interest rates, including mortgages.
Based on the "1 million principal, 30-year, equal principal and interest" mortgage loan model, the report calculates changes in monthly supply. In June, the report reported that the average monthly supply of 64 cities in the country was 5,637 yuan, a decrease of 94 yuan from the level of 5,731 yuan at the beginning of the year. From the perspective of the housing market, the reduction of the mortgage rate in the first half of this year will help reduce the pressure on the monthly supply and objectively help activate some of the wait-and-see housing demand, that is, it has a certain explanatory role for the recent active housing purchase transactions.
Monthly payment for the first house in 64 cities nationwide (1 million principal, 30-year term, equal principal and interest) Photo source: E-House Research Institute
The report believes that observing the trend of LPR interest rates in the first half of this year generally reflects the policy guidance for interest rate cuts. First, there were three RRR cuts in the first half of this year, which objectively increased the size of banks’ loanable funds, which helped commercial banks better implement interest rate cuts. Second, the urgency of resuming production and production in the first half of this year is relatively high. Commercial banks actively implement relevant department policies and effectively guide the reduction of medium- and long-term loan capital costs through interest rate cuts. Such policies have a positive effect on lowering mortgage interest rates and lowering mortgage loan costs.
Yan Yuejin, Research Director of the Think Tank Center of E-House Research Institute, stated that the executive meeting of the State Council on June 17 made it clear that comprehensive use of tools such as RRR cuts and refinancing will keep the market liquidity reasonably ample. The meeting also made it clear that the loan interest rate should be further guided downward. Such statements set the tone for monetary and financial policies in the second half of this year. It is expected that there will be room for further reductions in the LPR interest rate in the second half of the year, which will help drive down the mortgage rate. Combined with the increase in the supply of new disks and the aggressive price reduction and promotion of housing companies, housing transactions are expected to be further active. (Sino-Singapore Jingwei APP)