Real estate: the French are finally getting back into buying, both new and old

The Insee has observed a “fairly significant increase” in the proportion of households determined to buy a home in the next 12 months. This increase can be attributed to the drop in credit rates.

Traditionally, it is in the spring or at the start of the school year in September that the French take the step of buying real estate. The start of the 2024 school year should not be an exception to the rule, despite the real estate crisis. “Households have regained their appetite for the real estate market since July”observes Dorian Roucher, head of the economic situation department of INSEE, during the presentation of the monthly economic situation report of the Institute, this Monday, September 9. In August as in July, 9% of French households intended to buy a home in the next 12 months, compared to only 7% in June.

Since mid-2023, explosion of credit rates real estate obliges, this indicator stagnated at 7 or 8%. But, in the wake of a inflation back below 2% in August, and with commercial targets to be met by the end of the year, banks are now more inclined to lend. After a steady decline since the beginning of the year, then stagnating in August, the average mortgage rate has started to fall again this September, to fluctuate between 3.50% and 3.60% for 20-year loans.

Towards a restart of sales of new and old housing

And, according to some brokers, rates could fall to 3% by the end of 2024 if the European Central Bank lowers its key rates on September 12, which seems certain, and then a second time by the end of the year. “The drop in rates is the cause of the fairly significant increase in French people’s intentions to buy property in August”confirms Dorian Roucher.

The director of the economic situation department of INSEE thus predicts a resumption of housing purchases new in the second half of 2024. Similarly, in the old sector, he does not exclude that sales of old housing have “hit their low point” in March 2024, with 822,000 transactions carried out over one year. Transactions which should now therefore “to rise again, while remaining far from their 2021 peak”nuances Dorian Roucher. That year, sales of old homes had reached the historic record of 1,174,000 units, driven by your desire for space and greenery after the confinements imposed by the health crisis. And by credit rates of around 1%.