Bank credit for housing shows signs of slowdown

The dynamism of the portfolio reflects with a lag the performance of formal employment and the cycle of rising interest rates, which will also make this type of financing more expensive.”

BBVA analysis

Bank credit for housing is the one that has shown the greatest stability in recent years. In fact, at no time during the Covid-19 pandemic did it register a drop.

And although so far in 2022 this portfolio continues to grow, it shows a slight slowdown that, according to an analysis by BBVA, could be prolonged, in part, by the rise in interest rates.

Information from the Bank of Mexico (Banxico) specifies that as of last August, current credit from commercial banks for housing grew 2.9% in its real annual comparison, reaching a balance of 1.16 billion pesos.

However, this increase is less than the 3.3% recorded in July, the 3.4% in June and the 3.5% in May. In fact, it is the lowest growth since January of this year, when it was 2.8 percent.

The largest slowdown in bank credit for housing from 2020 to date occurred in November 2021, when the portfolio increased 2.3 percent. However, the positive behavior stood out over others such as consumption and companies that did show significant falls during the health contingency, although these already show recovery.

According to BBVA, the growth of the housing portfolio would be limited by the lower dynamism of formal employment, and an environment of higher long-term interest rates.

“This downward trend could be prolonged, since the dynamism of the portfolio reflects with a lag the performance of formal employment and the cycle of rising interest rates, this type of financing will also make this type of financing more expensive,” says the most recent monthly banking report prepared by the economic studies area of ​​BBVA Mexico.

A few days ago, the president of the Association of Banks of Mexico (ABM), Daniel Becker, acknowledged that it is likely that double-digit rates will begin to be seen in mortgage loans – when in recent years they have been, on average, at a digit–, since, derived from the monetary policy to try to contain inflation, also the 10-year bonds –which are the ones that are normally taken as a reference for this type of financing– are already close to 10 percent.

“As much as it is an element of competition, we are probably already beginning to see low double digits (in the rates of these loans) and that is why it is important to anchor inflationary expectations,” said the President of the bankers.

BBVA in the lead

Based on information from the National Banking and Securities Commission (CNBV), last July it was BBVA that led in housing loans with a portfolio of 300,000 million pesos.

Banorte followed with 212,192 million pesos; Santander with 204,477 million; Scotiabank with 185.844 million, and HSBC with 114.146 million.

Delinquency below 3%

As for delinquency in this item, it stood at 2.91% last July, slightly higher than the 2.90% of the previous June, but lower than the 3.50% of July 2021.

eduardo.juarez@eleconomista.mx