To view this message as a file, click here.

  • This box discusses trends in the housing credit market that partly explain the divergent trends between residential credit and developments in the housing market.
  • In 2025, housing credit continued to grow at a rapid pace (7.4 percent), even though the volume of transactions in the housing market declined, particularly in purchases from contractors.
  • Naturally, there is a timing gap between the date on which a home purchase transaction is signed and the date on which a housing loan is taken out (hereinafter: the “timing gap”). The widening of this timing gap was supported by developers’ financing incentives in recent years, which contributed to higher sales in 2024, as well as by the lengthening of construction periods.
  • The timing gap varies according to the type of purchaser (first-time home buyers, replacement-home buyers, and investors) and the type of seller (purchases from contractors and second-hand purchases). During 2018–2022, the average timing gap was about half a year. Beginning in 2023, however, this gap widened, and in 2025 the average timing gap reached about eight months.
  • In addition to differences in the timing gap, there are other differences among purchaser groups. First-time home buyers rely more heavily on housing loans than replacement-home buyers and investors. That is, some transactions by investors and replacement-home buyers are financed without the need for a housing loan from the banking system. In addition, there are moderate differences in the average loan amount across purchaser groups.
  • About 46 percent of loans are disbursed in several tranches, and in these loans the drawdown is completed within less than a year. In general, about 80 percent of monthly credit disbursements represent the initial disbursement of a new loan.
  • The widening of the timing gap does not, in itself, indicate rising risk in housing credit. Nevertheless, the longer the period between the date of the home purchase and the date on which financing for the transaction is completed, the greater the uncertainty regarding the pricing of housing loans that will prevail at the time the transaction is completed, as well as regarding the purchaser’s ability to complete the transaction.
  • As the delivery date of homes purchased with financing incentives approaches, and households are required to complete the financing of those purchases, we expect to see continued growth in housing credit.
  • The Banking Supervision Department continues to track developments in housing credit in order to ensure that risks in the housing credit portfolio are monitored and managed in accordance with accepted and sound risk management practices.