Ihe times are tough for those looking for a mortgage to finance the purchase of their home. In a few months, interest rates have jumped, going, for example, at the broker Meilleurtaux, from 1.50% on average in April 2022 to 3.20% currently, for a loan over twenty years.
Result: the prospective buyers must, with the same budget, deprive themselves of approximately 11 square meters, according to the latest calculations by the Banque de France. Above all, many buyers see their credit application purely and simply rejected.
The share of financeable files fell from 64% to 56% between January 2022 and March 2023, at Meilleurtaux. It reached 70% in 2021. A phenomenon that we observe in others. We tested three borrower profiles with four brokers: all got their loan a year ago; now, one can no longer have access to financing, while, for the other two, the situation has seriously deteriorated and will not improve if the rates continue to rise, which is more than likely.
The mourning of high prices
Of course, each situation is unique. However, one thing is certain: banks are particularly scrupulous when it comes to granting mortgages. The files are combed through: the income of those who borrow, obviously, but also the personal contribution, the professional situation, the management of the accounts, up to the ability to save before, but also after, the purchase . For the moment, we are not witnessing a general blockage, and the demand and the volume of credits distributed remain significant. However, the situation could seize up quickly.
Part of the solution to this looming deadlock lies with the sellers. Everything will depend on how long they take to mourn the high prices that were reached in 2022. The time has not yet come, even if indicators are already pointing to price drops in certain metropolises and regions – a movement which remains limited, no one being able to say when it will grow. Probably because there are other factors supporting the real estate market, such as the housing shortage in France or the return of wealthy foreign investors to some areas.
In any case, the party is well and truly over on the real estate market. And nothing should be expected on the interest rate side: the most optimistic do not foresee an easing on this front before the second half of 2024. The time when some could borrow below 0.90% over twenty years is a thing of the past and is not about to return.