The housing market did not deteriorate further last quarter. For the first time in a year and a half, the number of mortgage applications increased compared to the year before – albeit very slightly, by 1 percent. This is evident from new data from advisor De Hypotheker. Last quarter, the number of mortgage applications was 31 percent lower than a year earlier.
The average amount for which people applied for a mortgage also increased slightly, to 316,000 euros. According to De Hypotheker, bids above the asking price are also being offered more often.
It is mainly young people who buy houses. Their share increased by six percentage points in one year, and even by a quarter compared to the previous quarter. More than half of mortgage applications are now made by someone under the age of 35. That is a remarkable break from the trend in recent years. In the tense housing market of the time, this group barely got a foot in the door.
More than half of mortgage applications are made by people under the age of 35
The recent figures from the NVM real estate agents’ association also point in the direction of a housing market that will not collapse further. House prices fell 1.7 percent last quarter compared to the year before, to 422,000 euros. Compared to the second quarter, they increased slightly. It took less time to sell a house last quarter – an average of 33 days.
De Hypotheker and the NVM therefore speak of a housing market that is “recovering”. However, the question is whether this will continue: after three quarters of a year in which mortgage rates were reasonably stable, mortgage providers have increased their interest rates again in recent weeks. They even did this during the weekend, as a result of higher interest rates on the capital market. Higher mortgage interest rates mean that home buyers can borrow less money and have to pay more monthly. This makes houses less affordable.
That is why house prices started falling in the spring of 2022, after years of rising after rising. The invasion of Ukraine caused economic uncertainty, higher interest rates and less confidence among home buyers. Prices are now stabilizing or even rising slightly again. This is because the shortage on the housing market is still great: according to research agency ABF Research, there are 390,000 too few homes this year.
While more mortgages are being applied for to purchase a home, the demand for other types of mortgages is actually decreasing. This means less money is borrowed to make the home more sustainable. This is probably due to the increased interest rates.
A version of this article also appeared in the October 14, 2023 newspaper.