In 2019, the best mortgage rates increased slightly. At the end of the year, despite this small increase, the context remains favorable for buyers. Will the trend continue in 2020 for mortgage rates?
The time has come to take stock of the past year, then to question what can be expected in the coming months.
Loans still attractive in 2019
2019 was a particularly dynamic year in the real estate market. Despite a slight increase in rates in the first half, buyers have remained confident – and the number of transactions has not decreased. For this year, according to Good Credit, there should be around 910,000 transactions in the old and 130,000 retail sales in the new : these two data have never been higher during this decade !
During the last quarter, further (minimal) declines were observed in real estate rates: 1.56% in September, 1.55% in October, 1.54% in November. Far from being significant, they above all demonstrate a certain stability.
If we are beyond the historically low rate of November 2016 (1.31%) , the configuration remains profitable. In December 2019, the average market rates are as follows:
- 1.22% over 10 years;
- 1.51% over 15 years;
- 1.72% over 20 years;
- 2.01% over 25 years.
As a reminder, the average rate was 3.08% in 2013: by comparing the current situation to that which was current a few years ago, we put the recent slight increases in perspective .
Rate hikes in 2020: what impacts for buyers?
The year 2020 will be marked by inflation which will naturally have consequences for the real estate market. Despite everything, the banks have high objectives and, to satisfy them, they will have to be aggressive, by proposing advantageous credits for their customers. Thus, the first months may well be a continuation of the end of 2019, under the sign of stability.
Thereafter, a slight increase could occur during 2020. However, buyers should not be discouraged: rates will be higher, without reaching exceptionally high levels. For example, at the end of the year, some real estate specialists forecast a rate of around 2% for 20 years .
Finally, all the elements currently known suggest a relative stability of mortgage loans in 2020, with a moderate upward momentum. On the other hand, future buyers must also prepare for the increase in property prices. The cost per square meter in the old continues to climb, while the modifications made to certain aids in the new could jeopardize certain projects.
In the end, according to Good Credit, the number of real estate transactions in 2020 will probably be lower than the exceptional score of 2019.
However, these slight changes in the context will not discourage all buyers: faced with the rise in average rates charged, why not surround yourself with experienced brokers ?