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What is actually happening in the housing market? You have undoubtedly heard or read something in the news about cooling house prices, rising (mortgage) interest rates, and upcoming changes to mortgage rules. In this blog, we list this for you. And we help you to become familiar with the world of mortgages, the housing market, and the financial sector.
What is happening in the financial sector?
The European Central Bank (ECB) has already raised its interest rates (substantially) on a number of occasions. With this, the ECB wants to slow down economic growth and weaken inflation. Does the rising mortgage interest rate have anything to do with this? Yes, because many interest rates – including mortgage interest – are directly or indirectly dependent on the interest rate of the ECB. So if the ECB interest rate rises, the mortgage interest rate will also rise. But a rising ECB interest rate also means that the interest on your savings account will rise, which is of course good news for your piggy bank!
What effect will this have on the housing market?
The first effects of the rising ECB interest rate are also indirectly reflected in the housing market. Because mortgage interest rates are rising, house prices are cooling down somewhat. But this effect differs greatly per type of home and per region. It is noticeable that home buyers are less and less likely to bid above the asking price. And houses are on the market for a little longer.
These developments affect the number of applications for a mortgage. In October, this number fell by no less than 31% (compared to the average number of mortgage applications in October over the past four years). The large decrease is mainly due to the fact that switching from the current mortgage to a new mortgage (with a lower interest rate) is now less popular. It was striking that the number of new mortgages for first-time buyers increased slightly. The biggest increase is in transferring the low mortgage interest rate to the next house. By way of comparison: in October last year, 0.05% of those moving on made use of this scheme. This year, that number was about 12% in that month.
Sustainability is popular
The financing options for making your home more sustainable are becoming increasingly attractive. There are therefore various options for financing sustainability. In addition, from 2024 the government wants to take more account of the energy consumption of homes when determining the maximum mortgage.
Are you buying a home with a green energy label? Or do you opt for energy-saving measures? Then you may be able to get a higher mortgage because your energy costs are often xx1toto lower. In addition, homes with a green energy label are less affected by falling house prices, they sell faster and more often than the asking price is paid. It is therefore not surprising that ‘greener’ homes are increasingly popular.
