Europe

As mortgage prices fall, fewer people are in a rush to get a mortgage

As mortgage prices fall, fewer people are in a rush to get a mortgage

housing

Realtors and property developers are projecting a much lower annual growth rate of 3% to 5% this year.

Realtors and property developers are projecting a much lower annual growth rate of 3% to 5% this year.

Residential units under construction in Luxembourg City

Photo credit: Jerry Huberty

This week’s data show Luxembourg has another sign of a cooling housing market, with fewer people taking out mortgages from April to June compared to the first three months of the year.

The number of mortgages fell due to declining consumer confidence and a “less favorable outlook” for the housing market, the National Bureau of Statistics Statec said on Tuesday. Market participants are pointing out that rising interest rates are causing higher mortgage costs.

Banks offered 18% fewer fixed-rate home loans from April to June than in the same period last year, but applied for 5% more variable-rate loans, Statec said. Fixed-rate mortgages set him at an average of 2.3% in June, according to Statec, and he’s up 0.9% over the year. Meanwhile, floating rates averaged 1.3%, up 0.1% over the year.

house prices are 8% from April to Junedown from a 10.5% increase in the first three months of the year, real estate website atHome said last month.

Prices have increased by about 12% to 15% annually since 2018, with a maximum increase of 17% in 2020. A modest increase of just 3% to 5%atHome said in a separate outlook report in April.

According to At Home, rising mortgage rates have resulted in many people stopping their search for a home to buy, forcing some to rethink their budgets.

Market participants said the coronavirus and the war in Ukraine were the main factors behind the economic slowdown.of Cost of building materials such as wood and steel has skyrocketed since the pandemic and even more since the outbreak of war, with material costs up to 20% higher than pre-pandemic.

Inflation has accelerated at the fastest pace in decades around the world in recent months, with central banks raising interest rates to prevent economies from overheating. Banks pass on these high borrowing costs to their customers with loans such as mortgages.more homeowners as well eager to put their property on the market Real estate experts say sooner or later because they fear prices could slow down.


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http://www.luxtimes.lu/en/luxembourg/fewer-people-take-plunge-on-mortgage-as-prices-cool-6305f42dde135b923660098b As mortgage prices fall, fewer people are in a rush to get a mortgage

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