2023-09-18 10:01:56
Real estate rates once once more increased in August to 3.8% on average. They exceed 4% for rates at 25 years and stand at 3.92% at 20 years.
The months go by and are similar on the real estate rate front. August was no exception to the rule and rates increased once once more. They now reach 3.8% on average, according to figures from the CSA – Crédit Logement Observatory. Since December 2022, the average rate has increased by 145 basis points (or 1.45 percentage points), it actually reached 2.35% at the time. In detail, the rate at 15 years stands at 3.72%, that at 20 years is close to 4% at 3.92% and that at 25 years exceeds them at 4.08%.
Furthermore, the average duration of loans granted has stabilized since last spring, at a level rarely observed in the past (20.8 years, compared to 13.6 years in 2001). “But the increase in loan rates neutralizes the advantage of an extension of duration for most borrowers seeking to reduce their rate of effort. The only increase in the average loan rate reduced the capacity to borrow by 12.7%. “household borrowing since December. Concretely also taking into account the reduced impact of the duration, a household obtaining a loan of 100,000 euros in December 2022 can only borrow 87,600 euros in August 2023”, specifies the study.
Activity is slowly rebounding
The effect of the monthly usury rate did not live up to expectations on the level of credit production. Certainly, the profitability of new loans is improving, but fewer and fewer households can borrow, with the ECB’s regular rate increases.
Little surprise: since June, credit market activity has rebounded more strongly than usual this summer. “For example, between June and July the number of loans granted increased on average over a long period by 1.6%; this year, following several months of falling, the increase was 30%. In August, this year the drop is only 11.6%, compared to 31.5% usually”, notes CSA Crédit Logement.
But taking into account the bad month of June, production measured on a rolling quarterly level is still falling: by 46.1% in August, year-on-year (following -51.5% in July). And the number of loans fell by 43.2% (-50.5% in July). “The market horizon seems to be brightening, in response to the rise in profitability of new production. But the recovery will be slow and hesitant, as long as access to credit has not been loosened by the Banque de France “.
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