The signing of new mortgages is still in the red in Spain and with double-digit falls. According to the National Institute of Statistics (INE), in the third month of the year have been registered 36,182 new loans for home purchase, 15.7% less than in March last year.
With the year-on-year decline in March, the home mortgage firm has chained two months of negative rates after the 2% drop recorded in February, while accumulates an interannual fall of 5.6% in the first quarter. This is reflected in a report by Idealista News.
The average amount of mortgages also remains negative, which It has fallen by 1.5% year-on-year in the third month of the year, to 142,663 euroswhile the capital lent by banks for the acquisition of real estate decreased by 17%, to 5,161.8 million euros.
Another of the most outstanding data from the statistics agency is that, with the increases in interest rates agreed by the European Central Bank (ECB) to contain inflation, the average interest rate for all mortgage loans continues to rise. It is already at maximums since April 2017, after standing at 2.99% in the third month of the year.
Although these interest rates are considered high in Spain, they continue to be an attractive investment for Latin American countries. Especially for those with high inflation like Argentina.
On the other hand, 36.1% of mortgages on homes were constituted last March at a variable rate, while 63.9% were signed at a fixed rate. In other words, practically two out of every three operations continue to be signed at a fixed rate, although its weight over the total volume is the lowest since May 2021
Juan Villén, CEO of idealista/mortgagesexplains that “the mortgage data for March already clearly reflect the sharp drop that other leading indicators had been showing since the beginning of the year, a drop that we hope will continue in the statistics for the coming months, probably at least until the end of summer. This drop is the true consequence of two fundamental factors: on the one hand, the sharp rise in interest rates, which has expelled part of the demand, and on the other, the great uncertainty caused by the latest regulatory measures. This explosive cocktail, together with the increased profitability of alternatives such as fixed income, means that many families and investors have decided to postpone purchasing decisions, waiting for a more positive scenariowhich we do not see will arrive in the short term, at least this year”.
On the other hand, Villén stresses that “the price of new mortgages continues to rise, fixed mortgages surpassing the 3% barrier and reaching levels that we have not seen for 5 years, and fixed mortgages continue to lose weight in favor of mixed mortgageswhich continue to grow in the heat of a greater bank offer in this type of product”.
Asturias is the only community with a positive annual variation rate (0.8%), while The Balearic Islands (-31.0%), Madrid (-23.7%) and Castilla-La Mancha (-22.1%) led the decreases.
According to the INE, The communities with the highest number of mortgages on homes in March were Andalucía (7,280), Cataluña (6,467) and Comunidad de Madrid (5,515), and they are also the regions where banks lend the most capital. In this case, Madrid leads the ranking (with 1,200.2 million euros), followed by Catalonia (1,050.4 million) and Andalusia (879.5 million). The only community with a positive annual rate in the capital lent is Asturias (1.8%).
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