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The mortgage market continues to experience difficulties, mainly due to the increase in the cost of financing and increases in interest rates. According to data provided by the National Statistics Institute (INE), during the fourth month of the year, 27,053 loans were registered for home purchases, representing a decrease of 18.3% compared to the previous year and the lowest level observed since December 2020. As a result of this new decrease, the cumulative drop in new operations between January and April reached 8.4%.

Home mortgage signings have registered three consecutive months of negative rates, following the 2% drop in February and the drastic 15.7% decline in March. The capital loaned by banks for the purchase of homes has also decreased in April, standing at 3,704.7 million euros, representing a year-on-year decrease of 21.6%. In addition, the average amount of mortgages was set at €136,945, experiencing a decrease of 4.1% compared to the previous year.

It is important to highlight that the average interest rate applied to mortgages stood at 3.09% in April, reaching its highest level since April 2017. This increase is due to the measures taken by the European Central Bank (ECB) to contain inflation by implementing interest rate increases. The average term of these mortgages is 24 years.

In summary, the mortgage market continues to face difficulties due to the rising cost of financing and the increase in interest rates. During the month of April, a decrease in the number of loans for home purchase has been observed, as well as in the capital loaned and the average amount of mortgages. Likewise, the average interest rate has experienced a significant increase, reaching its highest level in several years. These conditions reflect the current market situation and the challenges facing homebuyers.

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In terms of mortgage types, the fixed rate continues to be the predominant option in new operations, although it has reached its lowest level in two years, representing 61.3%. This indicates that consumers are increasingly opting for alternatives such as mixed mortgages. For example, Evo Banco says that 70% of the new operations they are carrying out this year are mixed-rate, offering a fixed rate for the first few years and then converting to variable.

Juan Villén, director of idealista/mortgages, points out that "the data clearly reflect the acceleration in the reduction we are experiencing at the beginning of the year, and it is likely to continue at least until the end of the summer. The increase in interest rates has a major impact on these results, as it excludes from the market families and young people with lower incomes who cannot afford mortgage payments that are rising much faster than salaries".

According to Villén, "the decrease in the average amount of mortgages is due, on the one hand, to the need to adjust the amount requested to the installments that can be paid, and on the other hand, to the greater decrease in the number of loans in provinces with higher housing prices, such as Catalonia, the Balearic Islands or Madrid. In addition, interest rates continue to rise on both fixed and variable mortgages, a trend that will continue to be observed in the coming months. Fixed mortgages continue to lose ground to mixed mortgages, which are growing rapidly as an option increasingly offered by banks".

As for data by autonomous communities, Andalusia (5,473), Catalonia (4,477) and the Community of Madrid (4,373) are the regions with the highest number of mortgages constituted on homes in April. These are also the regions where banks lent the most capital, led by the Community of Madrid (882 million euros), Catalonia (697.8 million) and Andalusia (648.1 million).

In terms of year-on-year evolution, the capital loaned decreased in all the autonomous communities, with La Rioja registering the largest decrease (-41.4%) and Aragón the smallest (-1%). As for the number of mortgages signed, only Aragón experienced a year-on-year increase with an increase of 31.5%. On the other hand, the lowest annual rates were observed in La Rioja (-30.9%), Baleares (-28.4%) and Cataluña (-27%).

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