The fall in the mortgage market continues. In question: the rise in rates, purchasing power under pressure with inflation and the uncertainties linked to the war in Ukraine.
The plunge in the mortgage market is intensifying. In February, the overall amount of loans signed fell by a further 9.6% compared to January (-9.3% in number of loans), according to the latest data from the Housing Credit Observatory / CSA. If we compare it to last year, the fall is even more spectacular: -47.8% for production compared to February 2022 and -48.7% for the number of loans granted.
Taking a slightly larger scale of comparison, the number of mortgages is down 27.2% over the last twelve months (from March 2022 to February 2023) compared to the previous twelve months (from March 2021 to February 2022). At the same time, production fell by 28.2%.
A sluggish demand
A sudden fall, which nothing has helped to stop. The effects of the increase in the usury rate at the beginning of January (then in February and March), which could have made it possible to unblock the situation, were swept away by a new increase in ECB rates and loans: 2.82% in February average rate… compared to 2.61% the previous month, excluding insurance. This is the 14th consecutive month of increases.
In this context, demand is also at half mast. “With the tightening of access to credit, demand, weakened by the loss of purchasing power and the rise in inflation and mortgage rates, is indeed continuing its transformation: access to the market for borrowers modest loans is becoming more and more difficult, especially since the contraction of the banking offer caused by the deterioration in the profitability of new loans strongly penalizes households with low personal contributions”, analyzes the observatory. The latter also cites the uncertainties linked to the economic consequences of the war in Ukraine, which are holding back buyers.
Both new and old. households are also limiting their recourse to credit. The average amount of home loans fell by 5.8% over one year for the January-February period. “Borrowers carry out less expensive and less ambitious real estate projects”, summarizes the observatory.