·              · More than 400,000 transactions will be exceeded in 2024, similar to the figures for 2020 and 2021

• Author: Lucía Gómez

Source: El Economista 08/23/2024

The number of mortgages is recovering and will return this year to the levels of transactions of the years in which interest rates were at zero or even negative. This is the idea that emerges from the forecasts of Tecnotramit, which calculate that in 2024 400,000 of these loans for home acquisition will be signed, and from the cross-referencing of the data with those obtained in previous years, according to the National Institute of Statistics (INE).

The company expects that “the good muscle” of the labor market and the strength of the economy, with upward adjustments in the projection of its growth rates, will cause a boom in the mortgage market in Spain and a commercial battle between financial institutions that already began to be experienced at the beginning of the year. It was then that the prospects for interest rate cuts were modelled and the four or five downward movements were reduced to two.

Even so, Tecnotramit expects that more than 400,000 home mortgages will be signed in 2024. This figure would represent a significant improvement on the 381,560 that were placed on the notaries’ table in 2023, the year with the highest interest rates of the last decade. It should be remembered that interest rates began to rise in July 2022, just after the mobility restrictions derived from Covid-19 ended and with a significant bottleneck at certain points in the global value chain. In that year, 463,614 mortgages were closed, according to INE data, a figure that would exceed that expected for this year.

To find a similar figure, we would have to go back to 2021, when the rise in rates was not yet in sight and the Euribor was still in negative figures.

“After a certainly lethargic 2023 in financed real estate transactions, a certain rebound effect has already been seen in the first half of 2024, with figures already reaching levels of 2021 and 2022. This seems to continue to be the trend until the end of this year,” Carles Solé, coordinator of Mortgage Formalization at Tecnotramit, stressed yesterday.

Mortgage ‘war’

A few months ago, and with the aim of trying to alleviate the debacle that was being experienced in mortgage balances, the banks already stopped the rise in prices of new mortgages. After a few months on standby, a mortgage war began to take shape, which intensified after Christmas. Since then, the different entities began to reduce the price of home loans, especially in the case of mixed mortgages, fighting to recover part of the pie that had been paralyzed for a year.

This was joined by the first drop in interest rates in June and the prospects of a second one this fall. This caused the catalog prices – and consequently, also the signing prices of mortgages – to be reduced month by month, creating that mortgage war that marks the drop in costs of these loans. Thus, in 2023, variable or mixed rate mortgages regained ground, but fixed interest rates are being more attractive this year, which makes them prevail in mortgage financing, Tecnotramit reports.

The Euribor closed the month of July at 3.526%, but the figures for August so far suggest a new fall to levels closer to 3.2%. In this regard, Tecnotramit points out that this indicator could continue to decline and reach around 3.2% by the end of this year.