Real estate saved by the drop in credit rates?

Homebuyers can relax a bit. Mortgage rates have fallen since the beginning of the year. And although it seems that this movement has settled in recent weeks, it should continue when the European Central Bank lowers its key rates in June, as he suggested. The broker Pretto has calculated that the decrease in mortgage rates has already returned the purchasing power to those looking for a property.

After falling to 192,338 euros at the end of 2023, the loan capacity for a monthly gross salary of 4,000 euros was 200,819 euros at the end of March. However, it was 276,790 at the beginning of 2022, so the gain remains modest. To fully restore the purchasing power of debtors, real estate prices would have to fall by… more than 25%, if we rely on Pretto’s estimates.

We are far away: they fell by only 3.1% in 2023 in the ten largest cities of France according to MeilleursAgents. And the latest studies show a stabilization of prices rather than an acceleration of the decline. Under these conditions, can we anticipate a lasting recovery in the housing market?

There are many factors to explain the level of real estate prices. The lack of supply, in particular, which is felt cruelly in some regions. The current owners are not yet ready to agree to give up the sale proceeds that they could have hoped for just a few months ago.

They also have less incentive to sell if they borrowed in the last ten years to complete their acquisition. Now, credits are more expensive to finance the next one.

Professionals in the sector, real estate agents or brokers want to believe that things will gradually return to order. In any case, it seems illusory to count on a strong recovery of the market without further decline in prices. It is true that, apart from the candidates for the purchase, few people have an objective interest in it. Homeowners don’t need to find what they’re looking for, any more than real estate agents and developers. Neither, on the other hand, do the local authorities and the State, which derive part of their income from the transactions carried out.

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