If mortgage rates continue to rise this September, borrowers could soon be out of trouble. Although some professionals are already anticipating rates of 5%, others assure that a level has been reached.
What future for borrowers on the real estate loan market? For many months, bad news has been piling up for the contenders. First blocked by the usury rate, the maximum authorized all-inclusive rate above which a bank cannot lend, borrowers then saw rates increase month after month, going from 1% in February 2022 to 4% on average Today.
In this return to September, the rise continues. Banks are increasing their loan rates, notes Vousfinancer in a press release, which reports a rate of 4.25% over 25 years, even 4.5% in some establishments. Julie Bachet, general director of the broker, maintains a rate scenario of 4.5% by the end of the year and 5% at the start of 2024 taking into account the reappearance, but very marginal to date, of 5% rates in a scale.
What strategy for banks?
Traditionally in September, a month rich in real estate transactions, banks are lowering their credit rates to attract new customers and complete their credit production objectives for the year. This year, we see that the situation is completely different and that the banks are no longer in this strategy at all, quite the contrary, explains Sandrine Allonier, spokesperson for Vousfinancer.
Xavier Lacombe, co-founder of Artmis brokerage, confirms this trend, even estimating that the 5% mark could be exceeded by the end of the year: After a slight lull during the month of August, rates real estate credit will increase further in September. Some banks are already announcing substantial price increases of between 0.15 and 0.35 points. And this trend should continue during the last quarter: if rates rise, on average, 4.15% over 25 years, all signals suggest that they should reach 5% by the end of 2023.
The average rate in banks in September
- On 15 years old: 4.05% according to Artmis Courtage, 3.90% for Empruntis, 4.15% at Emprunt Direct, 4% according to Meilleurtaux.
- On 20 years: 4.20% according to Artmis Courtage, 4.05% for Empruntis, 4.25 at Emprunt Direct, 4.06% according to Meilleurtaux.
- On 25 years: 4.35% according to Artmis Courtage, 4.15% for Empruntis, 4.40% at Emprunt Direct, 4.19% according to Meilleurtaux.
Average rates observed by brokerage networks, based on scales provided by banks. They do not take into account the cost of borrower insurance.
Others are more optimistic, and promise candidates better days ahead in the near future. Mal Bernier, director of communication at Meilleurtaux, confirms an increase in bar prices in September, around 4.10% over 20 years and 4.20% over 25 years. But the good news is hidden elsewhere. Two banks return to the real estate loan market, with the aim of regaining customers, assures Mal Bernier. This is very good news, because competition will slow down the rise in rates. I am betting on a stabilization of 4.5%, I do not think that average rates will reach 5%.
The return of favorable competition for borrowers
Same story for Ccile Roquelaure. She hopes these returns will maintain average rates below 5% for a majority of the offer. The only subject really present remains the resources available to banks to lend, which requires future buyers to pay increased attention to the residual savings after the project and excluding the contribution.
In addition to competition, banks can now, thanks to a usury rate now set at 5.56% for the longest loans, rebuild their margins. Bank borrowing rates have been stable for several weeks at around 3%. So today, the banks’ margin is restored. All the signals are green for banks to start lending again, believes the communications director of Meilleurtaux. This is good news for borrowers who should therefore find establishments ready to follow them in the coming weeks to carry out their projects.
The fact remains that for a return to good times, borrowers will nevertheless have to wait for a significant drop in prices. If this has been initiated in recent weeks, it should accelerate over the coming months.
Thus, Meilleurs Agents has already noted that prices have fallen by -0.4% at the national level, but forecasts a decline in real estate prices of -4% over the next 12 months, and a downward cycle that should last longer. from 2024.
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