Credit rates further down
New historic record! While in March 2015 borrowers were in debt at 2.11% on average, compared to 2.21% in February, today they are borrowing at 2.03% on average. The consequence? The mix between a Pinel accelerator device for the real estate market and increasingly low rates gives the taste for buying for our taxpayers. In one year, the number of home loans rose 28%. Back on this market conducive to real estate.
Ever lower rates
In March, there was already an extremely advantageous interest rate for investors wishing to buy real estate. All loans were listed at rates below 3.5%. The loan duration remained stable and estimated on average at 17.4 years. In April, the fall in interest rates continued according to the House Credit. Today, it is estimated at 2.03% on average, a decrease of 3.94% in 1 month. The differences between new and old :
- In the new, the average rate in April stood at 2.02% (against 2.19% in March) for an average duration of 18.75 years.
- In contrast, in the former, the average loan duration is almost similar to that of new housing, 18.58 years and the average rate is slightly higher than that of new at 2.05% in April against 2.11% in March.
In general, more than half of the borrowers take out a loan for a duration of more than 20 years (54.2%) . Credit durations are getting longer and longer. Those with a duration of less than 15 years are less and less numerous (22.7% in the first quarter of 2014 against 17.2% in the first quarter of 2015). The explanation comes from the contribution which is becoming weaker compared to last year (-12.2%) and therefore oblige households to borrow over a longer period. And of course, the rate also varies depending on the amount of your contribution. The differences in borrowing rates are widening between a borrower profile with a contribution and good income and others …
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This is an unprecedented observation: + 28% in one year on the volume of mortgage loans. Several factors encourage the French to cross the threshold of real estate acquisition :
- Extremely low rates: it is estimated that this exceptional situation of low borrowing rates since 2013 is equivalent to a price drop of 9% in the old and 8.5% in the new. The French have understood this and are taking advantage of this extremely favorable market opportunity for real estate investment.
- A Pinel device that encourages and pushes investors to buy
- Aid always present to help first-time buyers: they are deemed necessary and have increased in one year. 61% of taxpayers were able to benefit from this state support, such as the zero rate loan. These support systems satisfied 92% of first-time buyers. Thanks to this boost from the public, these new owners are now more and more numerous and are at the origin of 35% of the transactions of this first quarter 2015 against 31% last year.
When real estate goes, everything goes. Seeing these optimistic figures from the start of 2015, we can say that we are hopeful for the rest of the year. The poor performance of 2014, when the number of loans had dropped by 6.4% is indeed behind us. The resumption of production is driven by a dynamic demand.