step 3 Logical tools getting assessing home loan lending character and you can family balance layer strength
Graph 1
Overvaluation methods indicate the level of RRE price misalignment, consequently they are utilized, with other related signs, to help you measure brand new downside threats to help you RRE costs
Sources: ECB and you can ECB calculations.Notes: Committee a) The fresh new overvaluation prices derive from the average out of several measures: a keen econometric design and family rate-to-money ratio deviation regarding historic average. Getting details, get a hold of Container 3 Equipment having discovering a possible misalignment out of house prices regarding essentials regarding the dilemma of the fresh ECB Monetary Balances Remark, and/or Field step 3 A model-centered valuation metric for belongings problem of the newest ECB Economic Balance Review. Toward y-axis, an advantage signal (+) means overvaluation and a without sign (-) undervaluation. Panel b) Results from an enthusiastic RRE rates-at-exposure design predicated on a panel quantile regression on an example regarding 19 euro city regions. Explanatory parameters: slowdown out of genuine domestic price growth, overvaluation (average from deviation away from household speed-to-money ratio away from a lot of time-term mediocre and you will econometric design), endemic exposure indication, individual believe signal, economic industry requirements signal trapping stock rates gains and you will volatility, government bond bequeath, hill out-of give bend, euro urban area non-financial corporate bond spread, and a communicating off overvaluation and you may a monetary criteria index.