Compared to January 2023, the total number of loans signed fell by 9.3% and their overall amount fell by 9.6%. (nattanan23/Pixabay)
The number of mortgages signed in February 2023 fell by 9.3% compared to January 2023. The downward trend in the mortgage market therefore continues, while rates have continued to rise for more one year. Buyers would be fewer and fewer.
After a prosperous decade for real estate loans, the market has been in free fall since the start of 2022. In February 2023, this collapse was amplified again, according to the latest data from the Crédit Logement / CSA Observatory relayed by BFM Business . Compared to January 2023, the total number of loans signed fell by 9.3% and their overall amount fell by 9.6%. Over one year, the number of loans granted even fell by a total of 48.7%.
Rates still rising
If we compare the last twelve months (from March 2022 to February 2023) with the previous twelve months (from March 2021 to February 2022), the number of loans granted has thus decreased by 27.2%. The direct cause of this deteriorated situation on the mortgage market is the continuous increase in rates for 14 months.
While the average rates were around 1.10% in February 2022, they reached 2.82% in February 2023. This corresponds to an increase of 0.21 points compared to the previous month, excluding insurance. This new rise in rates also makes it more difficult to obtain a mortgage, while the wear rate for loans of 20 years or more was raised to 4% on March 1.
Declining demand
In this situation, the demand for real estate loans is therefore, unsurprisingly, on the decline. On the one hand, the most modest borrowers, those with the least personal contribution, have less and less access to credit. On the other hand, the uncertainties related to inflation, purchasing power, and more generally the war in Ukraine are also hampering all buyers in their real estate projects.
Already, the real estate market would suffer the consequences of the current situation, whether on the new or the old. Especially since those who take out a mortgage do so for smaller and smaller amounts. “Borrowers carry out less expensive and less ambitious real estate projects” concluded the Observatory.