2024, worst year for mortgage credit since 2014

The total amount of new housing loans excluding renegotiations fell to 110,1 billion euros last year, compared to 128,6 billion euros in 2023 (-14%) and more than 200 billion euros in 2021 and 2022.

But the year 2024 was written in two stages: a very weak first half (less than 50 billion euros), before a recovery in the second part of the year.

"The first half of 2024 was catastrophic," recalls Ludovic Huzieux, co-founder of the Artémis brokerage network, during a meeting with the press held on Wednesday.

"There was a recovery effect which was initially quite timid and then quite clear at the end of the year," he explains, satisfied to start 2025 "with momentum, which was not the case for 2024."

The Banque de France is also keen to look at the glass as half full and notes a clear improvement in the total amount of loans granted since the spring as well as more favourable credit conditions.

With 11,6 billion euros in new real estate loans, December is also the best month of 2024.

Banks are back

The mortgage market is also picking up again, driven by banking institutions. Mortgage loans are also an important lever for them in recruiting new clients.

The banks are "all around the table wanting to lend," notes Mr. Huzieux, including national banks that were absent for part of last year.

Alongside the publication of their annual results, several banks reported a recovery in the mortgage market at the end of last year.

Crédit Agricole thus notes a rebound in housing credit in France (+18% over one year) in the fourth quarter, as does BPCE, which includes in particular the Caisses d'épargne and the Banques populaires (+30%).

BPCE CEO Nicolas Namais "sees a significant recovery" in the mortgage market between October and December 2024, in an exchange with AFP.

But he does not expect a miracle for 2025, given the expected low growth in the number of new homes and a "reasonable" increase in the number of real estate transactions.

Landing rates

According to initial estimates from the National Real Estate Federation (Fnaim), the total number of real estate transactions carried out in 2024 fell by 11% over one year, to 775.000.

In three years, the market has collapsed by 36%, "the biggest drop in sales in over 50 years", explained Loïc Cantin, president of Fnaim, on January 15.

The average interest rate on home loans continues to fall, to 3,30%, according to the Banque de France, but it could soon reach a low: after a year of continuous decline, several banks have recently raised their rates, according to two broker networks.

And the rate is excluding fees and insurance. Including all fees, rates reached 4,25% for a term of twenty years or more in the fourth quarter of 2024, according to the Banque de France.

For 100.000 euros borrowed over 20 years, you will have to count on almost 50.000 euros in credit costs over the duration of the loan.

This high rate level reached in just a few quarters represented a real shock for households' real estate purchasing power. In the first quarter of 2022, it was twice as low, at 1,80%.

At the same time, prices have only fallen slightly, complicating the economic equation for potential property buyers.

"There will probably be a stabilisation or even an increase in prices in certain departments, certain tense regions," warns Mr. Huzieux, "and that will probably penalize a little the restart of the volume of transactions." And credits.

Another consequence is that the average duration of loans is likely to continue to increase: it has exceeded 20 years, according to data published Thursday by the Crédit Logement Observatory, compared to 13,6 years in 2001 and 17,1 years in 2014.

Illustrative image of the article via Depositphotos.com.