historical series
In Spain, the burden of buying a home as a share of a typical family’s income has followed a long downward trend, yet remains stubbornly high compared with historical norms. The Bank of Spain notes that in recent years, the share required for a standard year’s payments has hovered well above a third of annual gross income, reflecting persistent pressure on household budgets. This pattern has been shaped by a combination of higher borrowing costs and steady housing demand, with mortgage financing becoming more expensive as interest rates rose. The assessment shows that households continue to grapple with how much of their income must be allocated to housing, even as lending activity has cooled and property sales remain resilient. Ownership costs are still a major consideration for families across the country, according to official data from the central bank.
Looking further back, the Bank of Spain highlights a peak in the early 1990s when the annual housing burden took up about three-quarters of a typical household’s disposable income. Even during the housing bust of 2008, the first year of payments required a sizable portion of earnings, underscoring the depth of affordability challenges seen over the past few decades. Experts have long advised that the annual portion of income dedicated to buying a home should ideally stay in a more modest range around thirty to thirty-five percent of earnings. The historical record shows a period of notably lower stress in the late 1990s, when the observed burden dipped to roughly a quarter of income before rising again as lending conditions and prices shifted. Bank of Spain data.
The number of years continues to decrease
Today, it takes around seven and a half years of gross income to buy a medium-sized home in Spain, a moving target that has trended downward since late 2022. This duration contrasts with the late-2007 peak during the last stretch of the property boom when nearly a decade of earnings would have been required for the purchase. The early data point from the late 1980s shows a much shorter horizon for buyers, indicating that the length of time needed to assemble the necessary funds has lengthened and shortened with the economic cycle. Even with the recent improvement, the overall measure has stayed above seven years since mid-2020, signaling enduring affordability pressures across the housing market. Bank of Spain data.
As recent years have unfolded, the gradual strengthening in incomes has not fully offset the influence of rising prices and mortgage costs. The Bank of Spain records show that the duration metric has moved lower from its previous highs, while still reflecting a market where many households require several years of earnings to secure a home in typical circumstances. This pattern aligns with broader affordability concerns that have characterized the residential sector for much of the past decade.
House prices are resisting
Official statistics from the National Institute of Statistics indicate that housing prices rose again in the latest quarter, continuing a lengthy stretch of year-over-year gains that stretches across multiple quarters. The housing ministry projects a continued price uptick, with a measured increase per square meter that underscores the ongoing strength of the market in the face of higher financing costs. By late autumn, the Euribor benchmark for most mortgages moved, then softened but remained elevated relative to historic norms, before easing again toward the end of the year. These movements in interest rates have influenced the cost of new borrowing and the monthly payments faced by buyers, shaping buyer sentiment and market activity. INE data, the Ministry of Housing, and Euribor figures together illustrate a housing market that is changing more slowly but continues to trend upward in price terms. The December rates for Euribor mark a notable shift, easing from higher levels seen earlier in the period. Data from housing authorities indicate prices holding at elevated levels despite a tighter lending climate.