Mortgage Rates in France Have Stopped Rising and Could Fall Soon
Mortgage rates in France have all but stopped rising, with negligible to non-existent growth recorded in May. Some are predicting a significant fall between now and the middle of summer.
Each month the Credit Logement/CSA observes the average mortgage rates available on the market. After months of small but significant rises – significant for the long-term outlook – May’s rise was an increase in name only. Mortgage rates grew just 0.01% and are now at the same level as in the summer of 2016.
The average for mortgage rates in France at the end of May reached 1.56%, from 1.55% at the end of April. For first-time buyers they were slightly higher; for new-builds they reached 1.63% while existing properties were at 1.57%.
“Since December 2016, rates have been rising,” the report reads, “but since February the rises have been especially week, and May’s were negligible.” It goes on to say that, “the rise is already slowing and rates have returned to the levels seen in the summer of 2016.”
Mortgage rates in France are still much lower than at the same point last year. They are 19 index points lower for new-builds and 12 points lower for existing properties. This explains why 3.3% more loans were taken in May this year than last, translating to a 9.4% increase in the total money lent. Average loan lengths remain unchanged from April, standing at 17.7 years (213 months).
The CSA do point out that activity is nonetheless falling after a busier-than-usual winter period, something that recent property price surveys also reported. The halt in rate rises could turn this around, as prospective buyers cotton on that they still have plenty time to take advantage of historically low rates.
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