Mortgage Delinquencies Drop by NIS 345 Million in Three Months

Mortgage payment delinquencies in Israel decreased by 345 million shekels (approximately $93 million) between June and August, according to Bank of Israel data. This reduction signifies that hundreds of households have exited the 'blacklist' of those falling behind on their mortgage payments.

Since the start of the war, mortgage delinquencies had significantly increased, reaching 4.1 billion shekels, a 53% rise compared to September 2023. The peak was in May of this year at 4.45 billion shekels. The recent drop represents an approximately 8% decrease, bringing the delinquency level back to that of May of the previous year, at 0.61% of total mortgage balances.

While specific data on agreements between banks and borrowers is unavailable, the consistent decline suggests that banks have reached numerous understandings with borrowers struggling to meet their monthly payments. The Association of Mortgage Consultants views this trend, along with other economic indicators, as "the beginning of signs of relief for households."

According to the Association, the decrease in delinquencies is encouraging, and the recent interest rate cuts are revitalizing the market. They observe increased activity in mortgage refinancing and a renewed interest from potential homebuyers exploring financing options and deals. The rise in external mortgage transfers, where borrowers switch banks, is also noted as a positive sign for competition, partly attributed to a reform by MK Yaakov Asher aimed at simplifying inter-bank transfers and empowering consumers.

Other mortgage market data from Bank of Israel shows stability. In August, total mortgage lending exceeded 10 billion shekels, reaching 10.3 billion. Investors continued to take out the largest average mortgages at 1.28 million shekels, followed by non-investor free market buyers at 1.09 million shekels, and subsidized housing buyers at 680,000 shekels. These figures align with recent trends.