How to view the continuous decline in mortgage interest rates
Our reporter Guo Ziyuan
The decline in the interest rate of personal housing loans has attracted market attention.
According to the monitoring data of the Shell Research Institute, the mainstream first-home loan interest rate in 103 key cities in July was 4.35%, the second-home loan interest rate was 5.07%, and the overall home loan interest rate hit a new low since 2019.
At the same time, the amount and speed of personal housing loans also rebounded.
What do you think of the continued decline in mortgage interest rates?
What will be the impact on housing demand?
Are mortgage rates still down?
The reporter interviewed relevant experts and scholars on these issues.
Why Mortgage Interest Rates Are Falling
Why do mortgage rates keep falling?
On the one hand, it is closely related to the market quoted rate (LPR) of loans with a maturity of more than 5 years.
Currently, 99% of mortgage interest rates are linked to LPRs over 5 years.
On May 20, the LPR over 5 years fell from 4.6% to 4.45%.
Since the LPR reform in August 2019, the LPR with a period of more than 5 years has gradually dropped from 4.85% to 4.45%.
On the other hand, in May this year, the regulator lowered the lower limit of the first-home loan interest rate, from "LPR with a term of not less than 5 years" to "LPR with a term of not less than 5 years minus 20 basis points".
According to the monitoring data of the Shell Research Institute, as of now, 74 of the 103 key cities have had mortgage interest rates as low as 4.25% for the first set and 5.05% for the second set.
"The decline in LPR has led to a decline in mortgage interest rates. Not only did the interest rates of newly issued mortgages decrease, but also the interest rates of existing mortgages." Zeng Gang, deputy director of the National Finance and Development Laboratory, said that this will help reduce the interest cost of home buyers and improve consumer spending. ability.
Synchronized with the "price drop" is the "volume increase".
The data shows that the new scale of real estate loans in June this year has increased significantly compared with that in May, and has increased more than the previous month for two consecutive months. Housing loans increased by 150 billion yuan.
"The current rate of lending has reached the fastest rate since 2019." Liu Zhongrui, head of the Statistical Information and Risk Monitoring Department of the China Banking and Insurance Regulatory Commission, said that the regulatory authorities instructed banks to improve the efficiency of loan approval to meet residents' reasonable housing needs.
Data from the Shell Research Institute also showed that the average loan period for individual housing loans in July was 25 days, 4 days shorter than the previous month.
How to Affect Home Buying Demand
Factors such as the decline in mortgage interest rates and the precise and effective prevention and control of the epidemic have jointly promoted the concentrated release of residents' housing demand in June, and the real estate sales situation has stabilized slightly.
"Since this year, the LPR for more than 5 years has been lowered, and the regulator has lowered the lower limit of the first-home loan interest rate, which has an incentive to promote residents to buy houses. In addition, the epidemic situation has stabilized, which has released the backlog of housing demand in the early stage. The sales area and sales of commercial housing in June The amount has recovered." said Lou Feipeng, a researcher at the Postal Savings Bank of China.
"In terms of sales area, the sales area of commercial housing in the first half of the year decreased by 22.2% year-on-year, which was an improvement from the 23.6% decline in the first five months; in terms of sales, the sales of commercial housing in the first half of the year decreased by 28.9% year-on-year, which was also better than the previous five months. It fell by 31.5%," said Wen Bin, chief economist at China Minsheng Bank.
In terms of sales price, the sales price of commercial housing in June generally stabilized month-on-month, and the number of cities that increased month-on-month increased.
According to data from the National Bureau of Statistics, the sales prices of newly built and second-hand housing in first-tier and second-tier cities have rebounded month-on-month.
In terms of the sales price of newly built commercial housing, the first-tier cities rose by 0.5% month-on-month, an increase of 0.1 percentage points from the previous month, and the second-tier cities changed from a month-on-month decline to an increase of 0.1%.
From the perspective of second-hand residential sales prices, first-tier cities changed from being flat to an increase of 0.1% last month, and second-tier cities fell by 0.1% month-on-month, but the decline narrowed by 0.2 percentage points from the previous month.
Driven by the release of housing demand, the willingness of the residential sector to increase leverage has recovered.
"In June, the medium and long-term loans of the residential sector increased by 416.7 billion yuan, the highest level since February, which shows that the willingness of the residential sector to increase leverage has recovered." Wen Bin said.
How will the market trend in the future
Will there be room for further reductions in mortgage rates in the future?
This mainly depends on whether the LPR over the 5-year period will further decline.
"Objectively, there may be room for decline." Zeng Gang believes that the current interest rate term structure changes inconsistently, and the reduction of LPR for more than 5 years is far less than the reduction of short-end 1-year LPR, so there is a possibility of further reductions in medium and long-term interest rates.
"We are still cautious about the consumption performance in the next stage." Wen Bin believes that first, the willingness of economic entities to consume is still not high.
According to data from the People's Bank of China, the willingness of urban residents to save has risen to 58.3% in the second quarter of this year, the highest level since statistics. Second, the precautionary saving tendency of the household sector is still high. In the first half of this year, household deposits increased by 10.33 trillion yuan. An increase of 2.88 trillion yuan year-on-year, a record high for the same period in history.
Based on the above factors, the market is highly concerned about the real estate trends in third- and fourth-tier cities.
"Currently, the large reduction in housing loan interest rates in third- and fourth-tier cities is due to the relatively excess housing supply." Lou Feipeng said that due to the impact of the epidemic, some residents' incomes have declined, and their expectations for the trend of housing prices have also been gradually adjusted.
Therefore, simply lowering the mortgage interest rate cannot effectively stabilize the real estate market.
Next, on the one hand, it is necessary to optimize and improve the policies for entering the city and settle down, especially related policies related to housing facilities, so as to attract people to settle down; demand and improvement housing needs.
Regulatory authorities are stepping up their support for the development of the housing rental market.
"The "Guiding Opinions on Supporting the Development of Affordable Rental Housing by Banking and Insurance Institutions" has been released, and the indemnificatory rental housing loans will be excluded from the concentration of real estate loans, so as to increase the enthusiasm of banks to provide affordable rental loans. Liu Zhongrui said that at present housing Leasing-related loans increased by 62.9% year-on-year.