Un couple discutant avec un conseillers des crédits immobiliers

Mortgage Loans: An Encouraging Market Recovery in 2024

After a particularly challenging year in 2023 — marked by a 40% drop in mortgage loan production — the real estate financing market has shown encouraging signs of recovery in recent months. The sharp rise in interest rates over the past two years had reduced French households’ borrowing capacity by around 30%, significantly slowing property projects, including in the high-end real estate segment.

The more favorable context at the start of 2024 now suggests a gradual recovery in property demand, supported by lower interest rates and price adjustments.

Mortgage Rate Trends: A Gradual Reversal

According to the French Mortgage Observatory, the average 20-year mortgage rate stood at 1.2% in January 2022, before rising to 4.45% by the end of 2023. Since March 2024, rates have declined to around 3.95%, marking a significant shift.

The decline in long-term rates since the beginning of the year has enabled banks to adjust their lending scales and bring renewed momentum to the real estate financing market. This development represents major relief for buyers, particularly in high-demand areas such as Paris, Neuilly, and Boulogne, as well as in high-end markets like Cannes, Brussels, and Marrakech.

Mortgage Loans: Current Trends

1. Overall Rate Stability Confirmed

Mortgage rates are stabilizing, although slight regional variations were observed during the first quarter of 2024. This stability is helping restore household confidence and improve visibility for property purchase projects.

2. A Gradual Recovery in Demand

Although the recovery remains somewhat fragile, indicators are highly encouraging. Many market players anticipate an acceleration in demand in the coming months.

This renewed momentum is largely explained by the decline in property prices observed over recent months, which partially offsets the previous rise in rates and restores purchasing power to buyers.

What Are the Prospects for the Coming Months?

3. Continued Rate Stability Expected

Forecasts suggest that mortgage rates will remain relatively stable, offering buyers improved clarity regarding their financing conditions.

4. Rising Demand Driven by Renewed Confidence

Improving household confidence, combined with better-controlled inflation in Europe and more flexible banking policies, should encourage a gradual increase in property demand throughout the year.

Mortgage Financing: A Clearer Environment for Buyers

In conclusion, the mortgage market now benefits from improved visibility. The rate decline observed at the start of the year, combined with moderating inflation in Europe and property price corrections, allows lenders to gradually ease their lending criteria.

Buyers can therefore plan their projects with greater confidence, including in the high-end residential real estate segment. In this context, 2024 appears to be a transitional year, offering encouraging prospects for the entire property sector.