The ECB’s interest rate hikes are already having a clearly appreciable effect on the real estate market. The number of newly subscribed mortgages stood in April at the lowest level since 2020 and experienced the biggest setback in two years. It also accumulates three months down, which has not happened since the time of the pandemic.
Mortgages signed in April stood at 27,053, 18.3% less than in the same month of the previous year and far from the figures at the end of 2022, when more than 40,000 loans of this type were signed month by month. The decline in April comes after another of 15% in March and another of 2% in February, resulting in a three-month downward sequence that has not occurred since 2021.
There are other signs that point to the cooling of the housing market. The average amount of mortgages stood at 136,945 euros, 4.1% less than a year earlier, and is the lowest since July 2021. Again, a similar trend can be seen: drop in the pandemic, to levels of 113,000 euros, a recovery in 2022 to close to 150,000 euros and, now, a decrease due to high interest rates.
The loans signed in April totaled 3,704 million euros, 21% less than a year earlier. They fell 17% in March and 0.9% in February, and current levels are almost half of the 6,318 million euros registered in September 2022.
The data known today coincides with a sharp increase in the cost of mortgages. The ECB began raising interest rates in July of last year and they are already at 4%, with signs of rising to 4.25% in July. The Euribor has reached 4% in the daily rate and is around 3.8% in the monthly average, far from the negative rates that it reached until April 2022.
The INE data also show that in April this year the new mortgages were signed for an average term of 23 years and an interest rate of 3.09%, the highest in a decade. Of the new loans, 57.9% were at a fixed rate and 42.1% variable, the former with an average interest rate of 3.29% and the latter with another of 2.78%.
So far this year, the number of mortgages signed in Spain has fallen by 8.4%, while the capital lent has fallen by 9% and the average amount by 0.7%.
The mortgage firm has fallen in all the autonomous communities except in Aragon, where it rose 31%. In Catalonia, the drop was 27%, compared to 21% in Madrid. The greatest fall occurred in La Rioja, of 30.9%.
