Signature mortgages showed a 14.2% decrease in the first half of 2023, according to the latest figures from the National Statistics Institute. In the first six months of 2022, there were 310,523 housing loan agreements, compared with 266,350 in the same period this year. Specifically, June saw 33,478 loans signed, a 21.9% drop from the same month a year earlier. This marks the fifth consecutive month with fewer loans than the previous year.
Real estate portal Fotocasa notes that these numbers suggest pre-pandemic normalcy has returned. The data for 2023 align closely with 2019 levels despite economic strains and higher interest rates this year. María Matos, a spokesperson for Fotocasa, adds that the figures underscore the robust resilience of the real estate market, even amid ongoing economic headwinds.
Higher interest rates since 2017
June featured the highest mortgage rates seen since 2017, with the average rate reaching 3.19%, another year-over-year rise and the third consecutive increase above 3%. The average mortgage amount stood at 143,796 euros, with an average term of 24 years, according to INE.
Loans totaled 7.31 billion euros in June, reflecting a 9.9% year-to-date decline versus the first half of 2022. Residential mortgage financing dropped by 15% so far this year, while the average loan amount slipped by about 1.5%.
In June, 40% of mortgages were signed with floating rates and 60% with fixed rates. Average rates were 2.84% for floating and 3.45% for fixed. Financial institutions’ strategy of lowering floating-rate prices while tightening fixed-rate terms appears to be paying off, and a shift toward mixed-rate mortgages is emerging as a popular option among banks, according to Fotocasa.
Euribor Moderation
The Euribor, the benchmark for variable-rate housing loans, paused in August after 19 straight increases. The indicator finished July at 4.19%, with August readings hovering near 4.07% as markets awaited the final figure. Even with rate rises cooling, Euribor continues to trend upward as lenders balance inflation fears, economic slowdown, and policy moves.
María Matos notes that while rate increases remain a feature of the landscape, the combination of financial turbulence and a slowdown in the broader economy has tempered the pace of hikes. That context helps explain the current shift in mortgage product preferences, including more attention to mixed-rate options that blend features of both floating and fixed rates, and the ongoing recalibration of mortgage pricing strategies across lenders.