The mortgage market continues to falter at the beginning of 2024. The rise in interest rates maintains pressure on the demand for loans for housing, which has already been in a twelve-month chain of declines, and pushes up the number of families that change banks. . your mortgage. According to the latest data from the National Institute of Statistics (INE), mortgage subrogations have skyrocketed by more than 34% in January compared to the same month of the previous year, up to a total of 2,307. To find a similar figure, we must go back to March 2022, at the beginning of the war in Ukraine, when these reached 2,374 transactions.
The rebound coincides with the extension of the Code of Good Practices for mortgagees in trouble, which extends the free change of bank to manage the mortgage for a few more months. Thanks to this, users will only have to face appraisal commissions, which are around 400 euros, according to the experts consulted. Although this option barely represents 20% of the modifications carried out in mortgages, it is a way available to consumers to improve the conditions when repaying the debt, either because the duration of the loan is lengthened or because it implies the change from variable to fixed rate. In this sense, we recommend opting for this alternative whenever you are paying above-average interest.
The increase in January occurs after financing costs have risen to their highest levels in the decade, with the average rate at which mortgages have been granted at 3.46%, due to the rise in the cost of both fixed and variable mortgages. despite the fact that the Euroíbor closed the first month of 2024 lower. The growth recorded by mortgage subrogations contrasts with the brake recorded in the change of owner (debtor subrogation), which falls more than 12%, to 429 operations, in line with novations (-12.2%), which entail Modifications in the credit requirements. This formula has been the most used, accounting for just over 9,000 of the 11,788 negotiations,
Although it is true that creditor subrogations are at low levels if compared to the years before the real estate bubble (2006-2008) when the dominant trend was that they exceeded 4,000, the latest rebound shows that the mortgaged are looking for a balloon of Oxygen after expectations regarding the lowering of reference money rates by the European Central Bank (ECB) have receded in time. With June as the most likely date on the time horizon for this to happen in the pools, the Euribor is back on track and is on track to end March at November’s highs, above the 3,609% it marked in January.
While clients seek to protect themselves with improvements in their contracts, the prevailing trend among entities is to retain clients with the best financial profile at a time when demand has lost strength. The ‘flight’ of the rates has also been reflected in the higher early amortizations, which are currently free, pushing the credit balance below the 500,000 million, minimum since 2006. In this context, and the problem of the delinquency, which although it is at its highest in November 2022 after exceeding 3.61%, the entities do not believe it will be a problem in the short term, the focus of attention is on the evolution of credit demand this year.
After a record 2021 and 2022, mortgage activity has moderated its pace, a behavior that has also extended to the beginning of the year. The small print is that on a monthly basis the number of transactions has shot up by more than 32%, up to a total of 33,128 contracts, and draws a halo of optimism within the sector, which is beginning to glimpse the first green shoots after months of being weighed down. . due to the rise in vertical rates, as reflected in the bank mortgage showcase. However, everything indicates that its reactivation will come when Christine Lagarde moves the first chip.
