three questions on the fall in rates, the decline of which is faster than expected

The decline, first announced by the Banque de France, accelerated. Average rates reached 3.83% in mid-April.

Mortgage rates are starting to fall. They have just fallen below the 4% mark, according to the Housing Credit Observatory published Tuesday April 16. The start of the year 2024 therefore has nothing to do with 2023. In detail, average rates reached 3.99% in the first quarter of 2024, 3.90% in March and even 3.83% mid -april. In December, less than four months ago, candidates for home ownership borrowed at 4.21%.

1 Was the decline expected?

The decline is rapid and even a little surprising. Last January, the Housing Credit Observatory expected rates to stabilize during the first quarter of 2024 and then only a decline over the months. The Observatory thus predicted a drop in rates from the second half of the year, with an average borrowing rate of around 3.25%. They are today at 3.83%, the decline has started early.

2 Is the decline likely to revive the real estate market?

The decline in rates is still slow and hesitant, but the engine is restarting. In 2023, the number of loans granted will drop by 40%. The drop was again 35% between the start of 2023 and the start of 2024. Since the end of last year, it has gone in the other direction: demand for credit increased by 46% between December and March. Banks are willing to lend, an act that has become profitable for them again, with potential new customers at stake. But it is the borrowers who are not rushing. They are waiting for a drop in prices, a drop in rates or even both at the same time.

3 Will rates fall further and by how much?

According to the Housing Credit Observatory, rates will be around 3.25% at the end of 2024. This drop is occurring in particular under the influence of the ECB, the European Central Bank, which is supposed to lower its rates. directors from next June. The reduction may also be based on a relaxation of the rules governing the granting of real estate credit. Today, the maximum debt bar for borrowers is set at 35%. MPs will debate its reform at the end of April.

But one trend is already very encouraging: the average amount of real estate transactions is rising for the first time in months. After a memorable fall, the average amount of a sale stood at 214,000 euros in the first quarter of 2024. It rose from 266,000 euros in 2022 to 208,000 euros at the end of 2023. Fewer square meters in more remote areas : buyers have gradually given up on the housing of their dreams. This is starting to change, so the dream would be allowed again.