Mortgage Rates Falling : A Golden Opportunity For Buyers ?

The access to mortgage credit is a key barometer of economic health and household purchasing power. After a drastic decline in borrowing volumes in 2023, the European Central Bank (ECB) has begun a shift with its first rate cut. This decision, praised by the Governor of the Bank of France, François Villeroy de Galhau, is accompanied by a series of indicators that herald a gradual recovery in the market. But is this improvement sustainable? And above all, will it be enough to sustainably reverse the trend for borrowers and stakeholders in the real estate sector?

A recovering credit market

“There are many positive signs today,” asserts François Villeroy de Galhau. Moreover, he notes that the recent 0.25 percentage point drop in the ECB’s main refinancing rate is starting to produce beneficial effects on credit granting. In January, the average rate of new mortgage loans stabilized at 3.32%, a level lower than that seen a year ago. At the same time, new mortgage loans (excluding renegotiations) reached €9.9 billion, a significantly improved amount compared to the historical lows recorded in 2023.

This new dynamic is largely explained by the correction of prices in the real estate market. According to experts, the combined adjustment of rates and prices allows borrowers to regain purchasing power. “In 2023, a purchase represented five years of income; it now represents only four in 2025,” specifies the broker Cafpi. This evolution helps to restore confidence to buyers and revive demand after several months of market paralysis.

Support measures to accompany the recovery

Beyond the effects of monetary policy, other levers are reinforcing this recovery. In fact, starting April 1^st, the zero-interest loan (PTZ) will be extended to the entire territory and to individual houses, whereas it was previously restricted to apartments in tight zones. A change that could facilitate access to ownership for many first-time buyers. Another encouraging element is the freeze on notary fees for first purchases, which further reduces the financial burden on households wishing to become homeowners.

However, this recovery remains fragile. If demand starts to rise again, with a record 55,000 credit applications in January 2025, economic uncertainties persist. The ECB’s monetary policy could still evolve depending on inflationary pressures, which would directly impact interest rates and borrower confidence. For experts, the real question now is whether this improvement is part of a sustainable trend or merely a technical rebound. In the meantime, borrowers benefit from a more favorable window to finance their real estate projects, an opportunity that may not last indefinitely.

While these signals are encouraging, they do not guarantee a massive restart of the real estate market. The trajectory of rates remains uncertain and could depend on the ECB’s next decisions. Moreover, banks’ caution in granting loans remains a limiting factor. For borrowers as well as investors, vigilance is therefore necessary in the face of a transitioning market.