The attraction of homeownership is receding as interest rates are rising, data published by the National Statistics Service (NSS) and the Bank of Greece show. The percentage of owner-occupiers among households started declining even before interest rates began rising in late 2005: From 85 percent in 2004, it dropped to 80 percent in 2005. Even in rural areas, it dropped from 100 percent in 2004 to 97 percent in 2005. This trend is expected to strengthen in 2006, as the successive interest rate hikes by the European Central Bank (ECB) are having an adverse impact on floating mortgage rates. Greeks, along with the Italians, are in the unenviable position of being offered the highest rates for mortgage loans, which, according to Eurostat data, averaged 4.76 percent in the first quarter of 2006, compared to 3.65 percent in Spain, for loans whose repayment period exceeds 10 years. In other words, for a 25-year, 100,000-euro loan at 5.35 percent, monthly installments reach about 605 euros. If the same loan was offered at a 3.35 percent rate, the monthly installment would drop to 490 euros. The bad news is that the ECB will likely continue its rate hikes in order to contain inflation. Thus, loans will continue to become more and more expensive. Floating-rate loans account for 95 percent of the total. The Bank of Greece has repeatedly warned borrowers to realistically evaluate their financial capabilities and not overburden themselves. Ideally, they should be able to maintain low indebtedness levels and be able to handle the rise of loan repayment costs. It seems, though, that the public, long accustomed to a period of high inflation, was so elated by the drop in interest rates after 1992 that they thought the low-rate loan was here to stay. In 1992, in order to buy an 80-square-meter flat, worth, back then, slightly under 47,000 euros, households borrowed at 24 percent. The monthly installment of a 25-year-loan, at 958 euros, amounted to 187 percent of the average household income then. Now, the same flat, worth 80,000 euros, can be bought with a loan of an equal amount, at a monthly installment of 690 euros, which is equal to 46 percent of the average household income. Thus, conditions today are nothing like what they were 14 years ago, or even 24 years ago. In its last report, the Bank of Greece remarks that demand for property will suffer as a result of rising interest rates for at least the next two years. In the long run, prices will start to fall.