Strong Growth in Mortgage Lending in Q1 2025

Strong Growth in Mortgage Lending in Q1 2025

📈 Surge in Loan Volumes

Mortgage lending in France experienced a sharp rebound in early 2025.

• Between March 2024 and March 2025, home loan production increased by 71%, rising from €7 billion to €12 billion.

• March 2025 loan volumes nearly matched those of December 2024, the highest month of the previous year.

• The trend started strong, with €9.9 billion in loans granted in January and €10.8 billion in February.

📉 Falling Interest Rates

• Average mortgage rates continued to drop in Q1 2025.

• The average rate fell to 3.16%, down 22 basis points since January.

• In March alone, the average was 3.09%, compared to 3.31% in December 2024.

• This decline was helped by the European Central Bank cutting its refinancing rate to 2.65% (as of March 12, 2025), along with cheaper retail savings funding.

📊 Higher Demand and Eased Lending Conditions

• Real estate demand is picking up: property search interest increased by 13.9% year-on-year nationally.

• Banks have also relaxed their lending criteria, making credit more accessible for households.

🔮 Outlook

• The combination of lower rates, rising demand, and easier credit conditions suggests a continued recovery in the housing market.

• However, future performance will depend on economic stability and interest rate trends.

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