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The rise in mortgages due to the Euribor leaves an 11% drop in home purchases

Date: July 18, 2024 Time: 11:02:47

The rise in interest rates has caused a decrease in both home purchases and the granting of mortgage loans. This month of May there were 11.4% fewer home purchase and sale operations than the same month of the previous year, in addition to a 23.9% drop in home mortgages.

On the other hand, the General Council of Notaries has observed a continuation of the rise in the average price of the square meter which, despite being only a slight increase, has affected the housing market. Specifically, the price per square meter increased by 0.8% compared to May of last year.

The rise in Euribor in the month of May has caused a collapse of both sales and mortgage loans in the housing market that continues with the trend of the previous month. In fact, April closed with even bigger drops in home sales (20.75% less) and mortgages granted (a drop of 32%)

Purchases only increased in two communities

In May, 58,880 home purchases were registered, according to operations notarized before a notary. By type of dwelling, apartment transactions decreased by 11.2% year-on-year, reaching 45,236 units, while single-family units fell by 11.8% to reach 13,644 units.

Sales fell in all the autonomous communities except Asturias (8%) and Murcia (1.3%). On the contrary, the greatest decreases occurred in Navarra (-22.8%); Basque Country (-18.7%); Balearic Islands (-18.5%); La Rioja (-17%); Madrid (-16.8%); Aragon (-16.1%); Galicia (-14.3%); Catalonia (-12.4%); Canary Islands (-12.2%) or Andalusia (-11.9%).

More than 56% of purchases were made without a mortgage

In May, the percentage of home purchases acquired with a mortgage loan stood at 43.7%, so that the remaining 56.3% were closed without financing. In addition, in purchases that required a mortgage, the loan accounted for an average of 70.2% of the price.

As a whole, mortgage loans for house purchase decreased by 23.9% year-on-year in May, to 25,754 operations, while the amount of these loans fell by 6.3% year-on-year, reaching an average of 141,915 euros.

Mortgages for housing fell in all the autonomies, the greatest decreases being those of Navarra (-40.6%); Cantabria (-28.6%); Balearic Islands (-27.5%); Madrid (-27.1%); Catalonia (-26.7%); Basque Country (-25.7%); Galicia (-23.8%); Valencian Community (-23.7%); Aragon (-23.3%); Extremadura (-21.8%); Andalusia (-21.2%); Murcia (-19.9%); Castilla-La Mancha (-19.6%); Castilla y León (-19.4%); Canarias (-15.5%) or La Rioja (-14.3%).

House prices remain positive

Faced with the falls in operations and mortgages, house prices rose in May, albeit moderately after becoming more expensive by 0.8% year-on-year to 1,616 euros/m².

The prices of flats experienced a decrease of 0.7%, reaching 1,766 euros/m², while the price of single-family homes reached 1,342 euros/m², 3.6% more. By order of magnitude, double-digit increases were recorded in Castilla-La Mancha (23.5%), the Balearic Islands (17.2%) and Asturias (17%).

* 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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