Real estate loan: here’s when rates will finally fall below 3%, according to Housing Credit

“The fall in mortgage rates will end quietly in 2025,” predicts Michel Mouillart, professor of economics and member of the Crédit Logement/CSA observatory.

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After having quadrupled between the beginning of 2022 and the end of 2023, putting a stop to the projects ofreal estate purchase number of households, credit rate have continued to decline for a year. In this month of January 2025, the average rate of home loans, all durations combined, does not exceed 3.24%according to Michel Mouillart, professor of economics and member of the observatory formed by the CSA institute and Crédit logement, the organization which guarantees real estate loans from banks. For comparison, this rate stood at 3.38% in the fourth quarter of 2024, after having exceeded 4% at the end of 2023.

If credit rates have been falling regularly for 14 months, it is thanks to the very strong slowdown ininflationwhich led the European Central Bank (ECB), from which banking establishments obtain financing, to reduce its key rates. Gold, “good news, the rhythm of theinflation will continue to decline”assures Michel Mouillart, who sees her at “1.7% at the end of 2025, as well as in 2026.” Consequence, “the ECB will continue to lower its rates in 2025, probably by 75 basis points in total, after the reduction of 100 basis points in 2024”he anticipates.

End of the rate cut in summer 2025

For Michel Mouillart, most of the drop in inflation and ECB rates will occur in the first half of 2025. He therefore still sees “six months of improvement in mortgage rates.” Understand, a further drop in rates which should lead them to “2.85% in the summer.” “Then the fall in mortgage rates will be stopped”predicts those who count on this same average rate of 2.85% for the end of 2025. containment to be attributed in particular to the increase in the rate at which France borrows from international investors on the financial markets, to more than 3% currently. “THE bond markets have badly digested the fall of the overthrow of the Barnier government”he explains.

“The fall in rates will end quietly in 2025, they will remain at these levels in 2026 and 2027”adds Michel Mouillart, recalling that 2.85%, which corresponds to 2014 levelsbefore rates begin to fall in 2015 and fall to 1% in 2021, is “a good rate.” “Credit conditions will remain correct, acceptable,” he insists. While warning that households risk seeing their real estate purchasing power weighed down by weak economic growth, expected at less than 1% in France by the Prime Minister, and by the rapid rise in unemployment.