The impact of macroeconomic indicators on mortgage lending for residential real estate

Sotnikov Oleksandr
PhD student, Department of Banking, State University of Trade and Economics, Kyiv, Ukraine, E-mail:mailto:alex.sotnikov365@gmail.com, ORCID ID: https://orcid.org/0009-0008-7547-8232

Cite this article:

Sotnikov O., (2024) The impact of macroeconomic indicators on mortgage lending for residential real estate. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Vplyv makroekonomichnyh indykatoriv na ipotechne kredytuvannja zhytlovoi neruhomosti; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 9 (322), pp. 54-62.

Abstract

This study delves into the intricate relationships between mortgage lending practices and a range of macroeconomic indicators affecting the residential real estate sector. The paper aims to provide a comprehensive analysis of how fluctuations in key economic factors influence mortgage market dynamics and consumer behavior. The research highlights several crucial economic indicators, including wage levels, market concentration, exchange rates, policy interest rates, and consumer price indices. These indicators are analyzed to understand their impact on mortgage lending volumes and real estate market stability. The study also explores the effects of different types of mortgage rates, including fixed and variable rates, as well as subsidized mortgage schemes, on both market performance and consumer borrowing patterns. By employing a robust analytical framework, this paper identifies significant correlations between economic variables and mortgage lending outcomes. For instance, variations in wage levels can affect borrowers' repayment capacities, while shifts in exchange rates and policy interest rates can alter mortgage affordability and demand. Additionally, the impact of market concentration on competition and pricing strategies within the mortgage sector is examined. The findings are intended to provide actionable insights for financial institutions, policymakers, and real estate stakeholders, offering a foundation for more informed decision-making. These insights are crucial for developing strategies that enhance the stability and efficiency of the residential real estate market, particularly in the context of evolving economic conditions. Overall, this research contributes to a deeper understanding of the interplay between macroeconomic indicators and mortgage lending, highlighting the importance of strategic planning and policy adjustments in maintaining a balanced and resilient real estate market.

Keywords

banking credit, residential real estate, mortgage loans, economic dependencies, wage levels, market concentration, exchange rate, policy interest rate, consumer price index, fixed and variable rates, subsidized mortgages.

JEL classification:G210; DOI: https://doi.org/10.32680/2409-9260-2024-9-322-54-62

UD classification:336.77

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