New mortgages at their highest level since May 2023

This rebound comes after the worst half-year in ten years for real estate credit.

A significant rebound, while interest rates continue to fall. New mortgage loans rebounded in July to their highest level in over a year, according to data published by the Banque de France on Friday, September 6.

The total amount of new housing loans signed in July, excluding renegotiations, amounted to €11.3 billion, compared to €8.6 billion in June and €8.1 billion in May. This amount had not exceeded €10 billion since July 2023, and we have to go back to May 2023 (€12.1 billion) for a higher level. This rebound comes after the worst half-year in ten years for real estate credit, in a market where buyers, stuck between still high rates and prices that are not falling or are falling only slightly, are rare.

The average interest rate (excluding fees and insurance) on these new loans stood at 3.64% in July, compared to 3.70% in June. It has fallen by 0.53 points since the peak reached in January 2024, the Banque de France specifies. The price of credit is still well above the 1.8% at the start of 2022.

“The context has clearly become more favorable for borrowers”, stressed Marie-Laure Barut-Etherington, Deputy Director General in charge of statistics at the Banque de France. She mentioned in particular “a drop in the cost of credit which began at the beginning of the year”in the wake of the drop in key rates by the European Central Bank and commercial offers from banks. “The continuation of the decline is conditional on what the ECB does.”

A summer slowdown – a traditionally quiet period for real estate transactions – is not excluded and could be seen in the autumn figures, noted Marie-Laure Barut-Etherington. Nevertheless, the favourable context “has not changed since May-June.”