Outstanding mortgage stock is the amount of mortgage debt still outstanding. People are obviously making repayments to their mortgages every month, with some homeowners paying off their mortgages altogether (usually by reaching the end of the mortgage term). At the same time new mortgages are issued.
Outstanding mortgage stock declines when redemptions exceed the lending of new mortgages. Here is the chart for Germany:
Higher interest rates are deterring people from buying, which has a knock-on effect on lots of industries. Lots of home furnishings, paint, white goods and garden furniture, are bought when people move home. People not moving = people not buying this stuff.
Is this a good or a bad thing? In an inflationary environment, this is a good thing.
All those furniture and white goods retailers will have to discount to get rid of stock. They might have to lay off staff, who in turn will curb their spending, which forces the shops they used to patronise to discount too.
At the end of the day, only recessions curb inflation. The choice for policymakers is whether they want an early mild recession, or a late severe one.
