Mortgages deepen their free fall to 22% while prices soar due to the rise in rates

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The rise in rates continues to shake the foundations of the mortgage market. The increase in the cost of money is causing many people to be unable to access a loan to buy a home while banks are increasingly raising the requirements to grant one of these loans. The result is a 21.9% drop in the number of mortgage contracts signed last June at a price that has shot up by more than one point compared to the same period of the previous year, up to 3.19% on average.

It is the x-ray that reveals this Thursday the Statistics National Institute (INE), which thus confirms the free fall in which the mortgage market finds itself after the boom that it experienced with the coronavirus pandemic.

Specifically, the number of mortgages constituted on homes in the sixth month of the year was 33,478, 21.9% less than in June 2022, at an average amount of 143,796 euros, 0.7% lower. Along with volume, the other striking figure has to do with price. After nine consecutive rate hikes by the European Central Bank (ECB) In the last year, the average rate of loans granted for housing in Spain in June reached 3.19%, with an increase of 1.37 points compared to the same month of 2022. In the case of the variables, the average rate at the beginning is 2.84% while the fixed rates are at 3.45%.

Another of the consequences of the monetary tightening in Frankfurt is that fixed-rate credits continue to decline. If a little over a year ago they set maximums of around 75% of the total, currently that percentage has dropped to 60%, compared to 40% of the variables, which continue to grow at the expense of the expansion of mixed mortgages.

The communities with the highest number of mortgages on homes in June were Andalucía (7,043), Comunidad de Madrid (5,675) and Cataluña (5,336). The only region with a positive annual variation rate is the Canary Islands (5.4%), while those with the greatest decreases in their annual rates are La Rioja (-64.7%), Castilla y León (-41.2% ) and Aragon (-33.0%).

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