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The Euribor, which plays a crucial role in determining mortgage rates, is expected to experience significant moderation in the coming years. According to Bankinter's Analysis Department, the 12-month Euribor could fall to 3.25% in 2024 and then to 2.75% in 2025.
At the same time, S&P projects that interest rates in the eurozone, after reaching a peak in 2023, will begin to decrease in 2024, stabilizing at an equilibrium level between 2% and 2.25%.
The Bank of Spain anticipates a similar trend, with a reduction in interest rates for the third quarter of 2024, reaching around 3.25%.
Impact on Mortgages and the Real Estate Market
The Savings Bank Foundation (Funcas) estimates that the increase in the Euribor in 2024 will lead to higher interest rates for variable rate mortgages, making monthly payments more expensive.
This increase could restrict access to financing for new buyers and put financial pressure on current homeowners with variable rate mortgages.
In an already sensitive property market, this increase could have a chilling effect, dampening demand and potentially affecting property prices.
Economic Perspectives and Their Influence on the Real Estate Sector
The evolution of the Euribor and interest rates, key economic indicators according to Bankinter and S&P, are crucial for the real estate sector. A falling Euribor could encourage potential buyers to enter the market, especially if this trend translates into lower mortgage rates.
However, the initial increase in the Euribor and interest rates could put upward pressure on financing costs, which could moderate housing demand and slow market growth.
Considerations for Investors and Homeowners
For investors and owners, understanding the fluctuations in the Euribor and interest rates, as the Bankinter and Funcas projections suggest, is essential.
A falling Euribor could mean lower borrowing costs for property investments, while an initial increase could lead to an increase in monthly payments for those with variable rate mortgages.
These variations emphasize the importance of careful financial planning and constant evaluation of the market.
Long Term Projections and Adaptation Strategies
Looking ahead beyond 2024, the Bank of Spain, Bankinter and S&P suggest that it is crucial for real estate market players to adapt their strategies to these economic projections.
The outlook for a lower Euribor and stabilized interest rates offers an opportunity to reconsider financing and investment strategies in real estate.
Buyers, sellers, investors and homeowners must be prepared to navigate an economic environment that, while showing signs of stabilization, is still subject to change and fluctuations.
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