high interest rates further hamper sales and construction

The institution totalizes all the files opened by large private banks. In September, 9.2 billion euros in loans were granted to French households. In August, we were still approaching 10 billion. September marks the lowest level in seven years, since 2016 precisely.

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The dizzying rise in interest rates over the past two years has intensified in recent months. Over the past two years, the average mortgage rate has quadrupled. In August, this rate was 3.62% and it increased to 3.73 in September. A final score in October even places this average mortgage rate at 4.12%. A dissuasive amount for households who want to borrow.

The real estate market almost at a standstill

This rise in rates, which makes credit more expensive, is combined with high building prices. Many households therefore prefer to postpone their investment plans or purchase of a property, apartment or individual house, and the profession is strongly affected. Statistics from the Ministry of Ecological Transition put the number of new housing units authorized for construction at around 371,000 between October 2022 and September 2023, a drop of 28% over one year. The number of building permits issued is stabilizing at the very low level of 30,000 per month. There is practically nothing happening on the market and real estate professionals are sounding the alarm.

When can borrowers expect to find affordable credit conditions again? We have to wait a few more months. After interest rates soared, central bankers began to talk about a ceiling being reached, and therefore a decline to come. When exactly? Nobody comes forward. According to observers, 2024 should be the year of stabilization, therefore the road to the end of the tunnel for households who wish to borrow… while impatiently waiting for 2025.