The number of mortgages for the acquisition of housing experienced a significant decline in April, dropping by 18.3% compared to the previous year. According to data published by the National Statistics Institute (INE), only 27,053 loans were granted during this period.
The average amount of mortgage loans for purchasing a house was 136,945 euros, which represents a 4.1% decrease compared to the previous year. The total loaned capital for housing stood at 3,704.8 million euros, marking a significant annual decrease of 21.6%.
The interest rates for these loans also saw an increase of 1.32 points in one year, reaching 3.09%. The majority of borrowers opted for a fixed interest rate, with 61.3% of mortgages granted at a fixed rate and 38.7% at a variable rate, according to the INE. The average interest rate at the beginning of the mortgage term was 2.78% for variable-rate mortgages and 3.29% for fixed-rate mortgages.
In addition to the decline in mortgage loans, there were also notable changes in the mortgage market. Registry changes, which include novations (modifications with the same financial entity), decreased by 23.1% year-on-year, totaling 9,907 changes in April. Specifically, novations decreased by 26.8%, while changes of banks (subrogations to the creditor) increased by 1.5%. Mortgages in which the owner of the mortgaged asset changes (subrogations to the debtor) experienced a significant decrease of 26.1%.
Overall, a total of 35,621 mortgages were signed in April, including mortgages on housing and those constituted on all types of farms, rural and urban. This figure represents a decrease of 18.7% compared to the previous year. The average amount of mortgages for all types of farms was 158,321 euros, which is 1.1% lower than the same month in 2022.
The decline in mortgage loans for housing, along with the changes in the mortgage market, reflects the current state of the real estate sector. These trends may have implications for the housing market and the overall economy.
What are the potential implications of the increase in interest rates for mortgage loans on the real estate sector and the housing market
Mortgages for home purchases experienced a substantial drop in April, declining by 18.3% compared to the previous year, according to data from the National Statistics Institute (INE). Only 27,053 loans were granted during this period.
The average amount of mortgage loans for buying a house was 136,945 euros, indicating a 4.1% decrease from the previous year. The total amount loaned for housing stood at 3,704.8 million euros, marking a significant annual decrease of 21.6%.
Interest rates for these loans also saw an increase of 1.32 points in one year, reaching 3.09%. The majority of borrowers chose fixed interest rates, with 61.3% of mortgages granted at a fixed rate and 38.7% at a variable rate, as per the INE. The average interest rate at the start of the mortgage term was 2.78% for variable-rate mortgages and 3.29% for fixed-rate mortgages.
Aside from the decline in mortgage loans, there were considerable changes in the mortgage market. Registry changes, which include modifications with the same financial institution, decreased by 23.1% year-on-year, totaling 9,907 changes in April. Novations specifically decreased by 26.8%, while changes of banks (subrogations to the creditor) increased by 1.5%. Mortgages involving a change in the owner of the mortgaged asset (subrogations to the debtor) experienced a significant decrease of 26.1%.
Overall, a total of 35,621 mortgages were signed in April, including mortgages on all types of farms, rural and urban. This indicates a decrease of 18.7% compared to the previous year. The average amount of mortgages for all types of farms was 158,321 euros, which is 1.1% lower than the same month in 2022.
The decline in mortgage loans for housing, along with the changes in the mortgage market, reflects the current state of the real estate sector. These trends could have implications for the housing market and the overall economy.
This decline in mortgage loans for housing in April, as reported by the National Statistics Institute, is a concerning trend. It could signal a slowdown in the real estate market and potentially impact overall economic growth. It is crucial to closely monitor and address the factors contributing to this decline to ensure a healthy housing sector.