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HomeLatest NewsThe bank advances the commercial battle for mortgages before the rate cut

The bank advances the commercial battle for mortgages before the rate cut

Date: July 12, 2024 Time: 16:27:12

Optimism around the mortgage market is beginning to ooze. The real estate sector has interpreted the data from the credit firm for housing, which has accumulated a year of decline after closing January with a collapse of 10.3%, in a positive key and is left with the monthly evolution, which shows a rebound of almost 33% compared to December 2023. Given this behavior, they predict that the storm has already passed, anticipating a change in demand trend. In these circumstances all roads now lead to the bank, which has already begun to slow down the price of mortgages.

The entities want to be ready so that the lowering of interest rates by the European Central Bank (ECB), which is discounted for the middle of this year, does not catch them on the wrong foot and they have begun to advance these changes in their showcase . commercial. Although not everyone has made a move, and those that have done so have gone at different rates, the reduction in loan prices has been a common practice in this first quarter. “At the beginning of March it could already be seen that the reductions in mortgages had reached the entire market, but with special intensity in fixed and mixed mortgages, something that at that time made perfect sense if the banks wanted to start an offensive. Finally and in the end they are the most hired,” says Kelisto.es spokesperson, Estefanía González.

According to the data collected by this price comparator, the greatest decrease has been registered in the case of fixed ones, whose average cut amounts to 0.27 points. That is to say, the average rate of all entities that have made changes to some of their products have collectively applied a reduction that amounts to almost three tenths. Banco Sabadell stands out, one of the most aggressive, which has reduced the interest on its subsidized fixed-rate mortgage from 3.4% to 2.8%; in line with Unicaja, which after carrying out two reviews in this quarter, has placed its fixed mortgage for payrolls exceeding 2,500 euros at 3.25% from the 3.9% stipulated at the beginning of 2024. The improvement already allows us to see interest rates below 3%, as is the case in Ibercaja, which offers its fixed mortgage at 2.99%.

In the mixed ones, for its part, the overall decline is 0.11%, while in the variable ones it barely reaches a testimonial 0.05% after the Euribor has registered two consecutive months on the rise. It should be remembered that the average rate at which new production has been granted in Spain in the first month of the year has risen to 3.46%, a level unprecedented since the end of 2014, so the data corresponding to February and March must already reflect these movements, according to the National Institute of Statistics (INE). The strategy of adaptation to the possible de-escalation of rates with the aim of positioning itself for the reactivation of mortgage activity was more pronounced in the second month of the year, leading to a calmer month of March, in which entities have I have chosen to be cautious and wait to see the trajectory of the index to which most mortgages in Spain are referenced.

Experts glimpse a turn that could deepen from now on in which fixed assets will begin to fall even more, as a logical step within the new monetary policy cycle that is approaching. This perception is shared by real estate portals. “2024 will be a year that will go from less to more, in which we will once again see how the market is overstimulated by the mortgage fight that the banks will wage,” says Fotocasa’s director of studies, María Matos. The pent-up demand this time, with potential buyers who have decided to wait for the increase in financing costs to reverse or who have had their access directly restricted, will play a key role.

Expectations regarding the reactivation of credit are high within the framework of a year that entities assume could be even better than 2023 in terms of profits and income. The issue is that they need mortgage activity to pick up to maintain results, which is why greater flexibility is expected when approving operations, without forgetting that almost four out of every ten homes that were acquired last year in this country do not include They decided to go through this procedure, choosing cash payment. One of the challenges faced by Spanish banks is their ability to maintain the outstanding balance of credit, which at the end of last year had decreased to its lowest levels in 2006, due to the increase in early repayments.

That is why the banking sector will closely monitor the course of home sales after softening its fall to 2.1% during the first weeks of the year, which risks a turning point according to experts. Although the lack of supply will continue to be the determining factor for growth, the main catalyst will come from new construction. Visas to build have skyrocketed to double digits, reaching a total of 9,430 applications, an unprecedented figure for a month of January since 2009, at the beginning of the real estate bubble.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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