The ‘Easter effect’ triggers mortgage signing by 28% in April and the interest paid on them drops slightly
The mortgage market soared in April with the subscription of 34,264 loans for the purchase of a home. There were not so many loans signed in a fourth month of the year since 2010. According to the Mortgage Statistics released this Thursday by the National Institute of Statistics (INE), in April there were 28% more concessions than a year ago, an increase that contrasts with the 18% drop recorded a month before. The coincidence of the Week on these dates is behind these pronounced ups and downs, given that last year the festivities fell in April, thus delaying the slowdown in signatures that this year was observed in March.
In the fourth month of 2024, 4,611 more mortgages were signed than in March and 7,501 more than in April 2023. With this advance, the market returns to positive territory after the deep fall in March, and does so with the largest year-on-year increase for a month of April since 2021, when concessions grew by 32.4% compared to the previous year in full recovery after the stoppage of the pandemic. “With these figures there is a clear recovery in the sector that is explained by the ‘Easter effect'”explains Ferran Font, Director of Studies of the real estate portal Floors.comwhich suggests that, once the level of this time of year has been overcome, the evolution will “in all likelihood” be much more moderate in May.
“The month of April is not representative and should not be taken into account when making a detailed analysis of the evolution of mortgages in Spain. Why? Holy Week falls on many occasions during this month. It happened in 2023, in 2022, in 2021, in 2020… But this year it has not been like that,” warns in the same sense the director of Mortgages at iAhorro, Simone Colombelli, who explains that the advancement of the festivities to March this year has This caused April to have more business days than in 2023, which has allowed more mortgages to be signed.
“As good as the April data is, it is by no means the best recorded in recent months. What’s more, if we go back only two months, to February, we see that almost 8% more signatures were registered that month, at reach 37,232,” Colombelli clarifies. However, the iAhorro spokesperson acknowledges that The figures “are positive and remove the idea that the mortgage signing in our country is falling or going through a bad time.
While signatures rose strongly, The average interest rate moderated slightly to 3.38% -with an average repayment period of 24 years-, just three hundredths below the April mark. This slight decline does not prevent interest rates from remaining at high levels. In fact, the April figure is the third highest value since December 2014, only surpassed by the 3.46% in January and the 3.41% in March. Despite moderating its advance in recent months, the average rate is three tenths above the 3.08% recorded in April of last year, accumulating 13 consecutive months above the 3% threshold.
The moderation of the average rate in April was mainly due to the relaxation of the fixed rate, which fell from 3.64% in March to 3.51%. On the other hand, the variable rate rose for the second consecutive month to reach an average of 3.25%, its highest level since December 2015. Despite the tougher financing conditions, the proportion of mortgages constituted at a variable rate increased slightly in April: 48.1% of the loans granted for the purchase of a home were signed at a variable rate, compared to 51.9% at a fixed rate. The majority of mortgage holders continue to opt for this second option, although the market remains divided.
Besides, The average amount of mortgages established on homes rose by 1.5% compared to April 2023, up to 139,328 euros. This increase in the amount, together with the growth of the firms, pushed the total volume of borrowed capital to almost 4,774 million euros, 30% more than in April of last year. Housing prices have not stopped growing in the last year. According to the latest data from the INE, second-hand apartments became more expensive in the first quarter of 2024 by 5.7% compared to the start of 2023 and new construction, by 10.1%.
In the coming months, the lowering of interest rates initiated by the European Central Bank (ECB) in June is expected to stimulate the granting of mortgages, although everything indicates that the pace of de-escalation will be slower than the increase undertaken by the authority. monetary to try to contain prices and return inflation to the 2% objective. “We are sure that from the second half of the year, with the lowering of ECB rates, the upward trend in mortgage signing will continue,” the General Council of the Official Colleges of Real Estate Agents assesses. of Spain (COAPI). “There is a demand that has been waiting for many months for a rate drop to request a loan”they add.
