Crisis and Italian Households: A Microeconomic Analysis of Mortgage Contracts

Abstract

Using information on about 2 million house purchase loans to households, this paper analyses the effects of the financial crisis on this portion of the credit market. From 2008 to 2011 the total number and value of new mortgages decreased sharply. The results show that young households and non-EU immigrants have been affected more by the decline of new mortgages. The worsening of the economic cycle and the tightening of the lending standards by banks seem to have had a stronger effect on these types of household. Interest rate increases for different groups of household have been fairly similar, albeit greater for smaller mortgages.

Note: Downloadable document is in Italian.

Keywords: mortgages, financial crisis, credit supply and demand, credit risk, interest rates on mortgage loans

JEL Classification: D10, E51, G21