The fall in mortgage rates continues in October. The decline, although very slight, affects the entire market, credit on old real estate, new real estate but also works. If credit volumes continue to plunge and the number of transactions continues to fall, this drop remains good news, as rates approach their historic low of November 2010.
Observers note that the outstanding home loans granted in 2012 by the banks will only be 115 billion dollars , after a good year in 2011 (162 billion dollars ) and far from the record for 2007 (170, 2 billion dollars ). The complicated economic situation partly explains why the demand for loans has weakened sharply since the beginning of the year with a return of the prudence of households in the management of their budget. In addition, the entry into force of the “Bases III” rules in 2013 pushes banks to lose interest in long-term loans which will be the most penalized by the new prudential framework.This is confirmed with an average loan duration stabilized around 216 months in the old (226 in 2011) and 225 months in the new (233 in 2011).
The fall in rates is not enough to stem the sharp fall in the volumes of transactions and loans granted. However, after 3.51% in August and 3.44% in September, the average rate excluding insurance for all durations combined reached 3.37% in October according to the Good Lenders. The same is true for the Cream Credit barometer, which notes a decline of -0.05% over 15 years and a decline of -0.10% over 25 years.
The volume of real estate loans obviously depends on the dynamism of the real estate market and the volume of transactions. In the provinces, there is indeed a drop in volumes in the former of 15% over one year at the end of June 2012 and even by 17% at the end of August. In IDF including, where volumes recorded a drop of 20% over one year at the end of July. The final outlook for 2012 raises fears of a significant drop in volumes in the former to around 650,000 sales, far behind 2011 (around 800,000) and in the new with 75,000 sales maximum (around 130,000 in 2011).
In this somewhat gloomy context, a novelty all the same which can be considered good news. The possibility of negotiating and obtaining a discount on the basic conditions offered would only be reserved for good profiles. Indeed, over a period of 20 years, and although this rate has remained desperately stable on average, a borrower with an average file will be able to obtain a “discount” bringing the rate to around 3.60% compared to the average grids offering 3.80% . A borrower with the best guarantees will get a rate close to 3.30% over the same period.
When the near outlook, observers forecast a further slight decline in November with a slight rebound in volume as all the banks will not have reached their targets and will be chasing new customers.
The mortgage market offers good prospects with a historically low average level. In a context of slight fall in real estate prices in the old and destocking in the new real estate, the investor who presents a good record can hope to make the best use of the credit lever to optimize his investment with very attractive conditions. The entry into force in January 2013 of the prudential framework “Bases III” will certainly have an impact on the distribution of credit by banks. It is therefore advisable not to waste time.