The French mortgage market suffered a major shock in the first half of 2024. The data shows 36% of new loans. This drop reflects a tense economic situation where interest rates, although slightly down, were not enough to revive the market. More details in the following paragraphs!
French mortgage credit at its lowest in 10 years
Even today, the French real estate market is struggling to recover. The total amount of new housing loans excluding renegotiations amounted to 47.3 billion euros between January and JuneThis represents a 36% drop over one year. It is the lowest level observed since 2014.
Despite interest rates that are a little more favorable to borrowers, households are struggling to get started on property acquisitions. The latter have gone from 4.17% in January to 3.70% in June The purchasing power of French real estate has been hit hard, with rates almost 2.5 times higher than in the first quarter of 2022.
A slow real estate market: What impact on the French economy?
In this contextproperty candidates are not rushing. The main obstacle remains still high real estate pricesdespite slight signs of a drop in interest rates. Banks and brokers also consider that the market is being held back by certain rules issued by the High Council for Financial Stability (HCSF).
THE political context of the month of June added a degree of uncertainty and wait-and-see attitude for households. Only a few signs of a timid recovery are perceptible, with a production of new housing loans of 8.6 billion euros in June. This is the second best month of the year.
Despite some signs of recovery in June, the mortgage market remains in difficulty. The generally calm summer months could make the situation worse. To hope for a sustainable recovery, a stabilization of the economy and a fall in property prices seem essential.
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