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SAO PAULO, Jan 21 (Reuters) - A measure of mortgage loan disbursements in Brazil rose at the slowest pace in more than a decade as rising borrowing costs, a stagnant economy and eroding confidence dampened demand for home loans, an industry group said on Wednesday.
The amount of mortgage loans funded with resources from the country's SBPE savings and loan system totaled 112.9 billion reais ($43.4 billion) last year, a 3.4 percent rise from 2013, according to Abecip, the group that represents mortgage lenders. Last year's increase was the lowest since at least 2003.
In 2013, disbursements of home loans from the SBPE surged 32 percent.
The results indicate that mortgages, a sector that has been frequently pointed to by banks as a safe haven for growth, are finally feeling the pinch of four years of disappointing economic growth. Banks in the country are betting big on the segment, particularly because the risk of default tends to be lower than other segments of credit.
Octavio de Lazari Jr., Abecip's president, said the rise "is coherent with the economic reality facing Brazil at the moment." The São Paulo-based group had targeted growth in the home loans market from the SBPE of about 15 percent for 2014.
Lazari forecasts mortgages funded by the SBPE, whose capital mainly comes from compulsory worker savings, to climb 5 percent to a total 119 billion reais this year. Commercial banks also finance home loans with their own capital.
For years, mortgage lending expanded due to a strong job market, declining interest rates and improved regulation, but some of those factors are now showing signs of fatigue. "We have witnessed a deterioration of several economic indicators that were supportive of the sector in the past," Lazari added. (Reporting by Marcela Ayres; Editing by Guillermo Parra-Bernal and Meredith Mazzilli)