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Crisis and Italian households: a microeconomic analysis of mortgage contracts

Author

Listed:
  • Roberto Felici

    () (Bank of Italy)

  • Elisabetta Manzoli

    () (Bank of Italy)

  • Raffaella Pico

    () (Bank of Italy)

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.

Suggested Citation

  • Roberto Felici & Elisabetta Manzoli & Raffaella Pico, 2012. "Crisis and Italian households: a microeconomic analysis of mortgage contracts," Questioni di Economia e Finanza (Occasional Papers) 125, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_125_12
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/qef/2012-0125/QEF_125.pdf
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    References listed on IDEAS

    as
    1. Francesca Modena & Concetta Rondinelli, 2011. "Leaving home and housing prices. The experience of Italian youth emancipation," Department of Economics Working Papers 1101, Department of Economics, University of Trento, Italia.
    2. Sauro Mocetti & Elisabetta Olivieri & Eliana Viviano, 2011. "Italian households and labour market: structural characteristics and effects of the crisis," Stato e mercato, Società editrice il Mulino, issue 2, pages 223-243.
    3. Eugenio Gaiotti, 2011. "Credit availability and investment in Italy: lessons from the "Great Recession"," Temi di discussione (Economic working papers) 793, Bank of Italy, Economic Research and International Relations Area.
    4. Leonardo Gambacorta & Paolo Emilio Mistrulli, 2014. "Bank Heterogeneity and Interest Rate Setting: What Lessons Have We Learned since Lehman Brothers?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(4), pages 753-778, June.
    5. Del Giovane, Paolo & Eramo, Ginette & Nobili, Andrea, 2011. "Disentangling demand and supply in credit developments: A survey-based analysis for Italy," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2719-2732, October.
    6. Paiella, Monica & Pozzolo, Alberto Franco, 2007. "Choosing Between Fixed and Adjustable Rate Mortgages," Economics & Statistics Discussion Papers esdp07033, University of Molise, Dept. EGSeI.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    mortgages; financial crisis; credit supply and demand; credit risk; interest rates on mortgage loans.;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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