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Forecasts on Interest Rates in 2024: When Will Mortgage Payments Become Cheaper

Forecasts on Interest Rates in 2024 When Will Mortgage Payments Become Cheaper - Forecasts on Interest Rates in 2024: When Will Mortgage Payments Become Cheaper

Interest rate forecasts are one of the unknowns in the real estate market. In recent months, the economic situation has changed significantly, with a notable moderation in inflation. For this reason, those considering purchasing a home look towards the future with some optimism. But will the cost of money go down, and with it, the cost of mortgages?

The starting point: high-interest rates

It was in July 2022 when the European Central Bank (ECB) began raising interest rates and did not stop until just over a year later, in September 2023. After ten consecutive increases, interest rates went from negative to 4.5%. At the same time, the Euribor, the reference index, moved from negative figures to far exceeding 4%.

At this point, the mortgage firm chained months of declines. According to data from the National Institute of Statistics (INE), in October 2023, the decrease in the interannual rate already exceeded 22%, while the interest rate had risen one point compared to the previous year.

Interest rate forecasts

As has been noted, the economic situation has changed in recent months. That runaway inflation caused by the ECB's decisions has already been contained. Therefore, the forecasts for interest rates also point to a change in trend that many home buyers were waiting for.

However, these interest rate forecasts do not indicate that the decline in the price of money is imminent or that it will be very pronounced. The ECB set the objective that inflation in the Eurozone would not exceed 2%, and although it lowered at the end of the year, the note that seems to guide decisions regarding the evolution of the price of money will be that of prudence.

In this way, the forecasts for interest rates suggest that they would not begin a downward path until June 2024. If the economic circumstances do not change, it would only be the beginning of that path. After all, we could see how the decline gets consolidated in successive months.

The one that already seems to have begun this trend towards moderation is the Euribor index. In fact, after peaking in October 2023, it closed December at 3.6%, far from the 4.16% of just two months before.

It is true that, since the sharp fall in December, the variations have been few, but it is, in any case, good news for those who plan to purchase a home soon. When could decreases in mortgage payments begin to be observed? The circumstance could occur as early as spring.

If you have considered buying a home and making the most of the more optimistic forecasts, go to Spainhouses.net. Wait no more to find your dream home. Enter your preferences in the browser and start your search.

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