A growing number of eurozone consumers are struggling to keep up with their housing and household utility bills, after years of above-target inflation and rising borrowing costs, according to European Central Bank research.
The share of lower-income households expecting to be late on utility or rent payments rose to more than 20% in the first quarter of 2024 from around 15% in 2023, ECB researchers Homeros Kouvavas and Desislava Rusinova said on Monday. in their article. For mortgage installment payments, the number almost doubled to 30%.
“Given the current and future impacts of both increased interest rates and the loss of purchasing power due to inflation, the ability of households to meet housing costs and mortgage payments is a cause for concern,” the article said.
Interest rate hikes to curb inflation have weighed heavily on the real estate market, where new investment has fallen. This is putting increased pressure on rents, which were high in many European cities even before inflation rose.
The ECB is likely to start cutting interest rates in June, with several members of the Governing Council and many politicians concerned that tight monetary policy is putting too much pressure on the economy of the 20 member countries of the euro zone.
