Mortgage firm recovers, returns to zero rates this year

Signature mortgage will recover and return this year to the operating levels of the years when interest rates were at zero or even negative levels. This idea comes from Tecnotramit’s forecasts, according to which they will be signed in 2024. 400,000 of these loans on housing acquisition, as well as the intersection of data with data obtained in previous years, according to the National Statistics Institute (INE).

The company predicts that the “strong muscle” of the labor market and the strength of the economy, as well as the upward adjustment of its growth forecasts, will trigger a boom in the mortgage market in Spain and a commercial battle between financial institutions that had already begun at the beginning of the year. That’s when the prospects for interest rate cuts were modeled and four or five downward movements were reduced to two.

Despite this, Tecnotramit expects more than 400,000 mortgages to be signed in 2024. This figure would significantly improve on the 381,560 that were placed on notaries’ desks in 2023, the year with the highest interest rates in the last decade. It should be remembered that interest rates began to rise in July 2022, just after the end of the Covid-19 restrictions on mobility and the emergence of serious bottlenecks at certain points in the global value chain. According to INE, 463,614 mortgages were closed that year, exceeding the expected figure for this year.

To find a similar figure, we would have to go back to 2021, when rate hikes were not yet in sight and Euribor was still in negative territory.

“After 2023, which was certainly sluggish in real estate financing, a certain rebound effect was already observed in the first half of 2024, reaching the levels of 2021 and 2022. It looks like this trend will continue until the end of this exercise,” he stressed yesterday. Carles Sole,

Mortgage processing coordinator Technotramit.

Mortgage “war”

A few months ago, in an attempt to mitigate the disaster that was being seen in mortgage balances, banks had already stopped the rise in prices for new mortgages. After several months of waiting, a mortgage war began to brew, which intensified after Christmas. Since then, various institutions have begun to reduce prices for home loans, especially in the case of mixed mortgages, in an attempt to regain some of the pie that had been paralyzed for a year.

Add to this the first interest rate cut in June and the prospect of a second fall this autumn. This has led to list prices – and therefore mortgage signing prices – falling month after month, creating the mortgage war that marks the decline in the cost of these loans. Thus, in 2023, mortgages with variable or mixed interest rates have regained their position, but fixed interest rates are more attractive this year, making them predominant in mortgage financing, Tecnotramit reports.

Euribor ended July at 3.526%, but data for August suggests a further decline to levels close to 3.2%. In this sense, Tecnotramit points out that this indicator could continue to decline and be placed around this year by the end of this year. 3.2%.