Alexandre Roos is pursuing homeownership in Téteghem, monitoring falling mortgage rates, which have recently averaged 2.97% for 20-year loans. Despite this positive trend, experts caution that significant price drops may be over. Meanwhile, real estate developers face challenges, particularly with unsold properties as tax incentives expire. Recent legislation banning poorly insulated homes could create opportunities for buyers, as many sellers opt for lower prices instead of renovations, highlighting potential for first-time buyers and investors.
Alexandre Roos and the Quest for Home Ownership
For the past two years, Alexandre Roos has been on a mission to secure financing for a single-family home priced at 264,000 euros in the charming residential area of Téteghem (Nord). He has maintained a close relationship with his bank to monitor interest rates and trends. “The encouraging news is that rates have started to decline at the beginning of this year, which is a positive sign for me,” shares Roos, reflecting on his journey.
This positive shift is also welcomed by the real estate developer who is showing him properties. “In January alone, we reserved three homes, surpassing our entire sales from the last year in just three weeks!” This surge in interest comes as mortgage rates have been on a downward trajectory for 15 consecutive months, culminating in an appealing average of 2.97% for 20-year loans as of February 2025. Is this the glimmer of hope buyers have been waiting for?
Shifting Trends in the Real Estate Market
However, Jean-Marc Vilon, the general director of Crédit Logement, offers a cautionary perspective: “The majority of the decline in rates has already occurred. Thus, there may not be significant benefits in waiting for further reductions.” He notes that while some buyers have been holding out for lower prices, many of the substantial price drops have already taken place, indicating that the best deals might be behind us.
A recent report from credit brokers indicates early signs of a slowdown in the declining mortgage rates, with several banks beginning to raise interest rates due to a fluctuating political landscape both within the country and internationally.
In October 2023, a team met with real estate developer Ludovic Scarpari, who was struggling to attract buyers for a housing development in Bron (Rhône). Since then, all 33 apartments have been completed, but five remain unsold. “It’s unusual to have five left out of 33,” he admits, pointing out that the expiration of the Pinel law on January 1, 2025—which previously offered tax advantages for investors—has complicated matters. “If the Pinel law were still in effect, these apartments would have sold quickly,” he laments.
On a brighter note, recent legislative changes might create opportunities for prospective buyers. A ban on renting out poorly insulated homes, classified as ‘thermal sieves,’ took effect on January 1, affecting around 500,000 properties with the lowest energy performance ratings. Célia Sackda is eyeing a 1910 workers’ house in Saint-Denis (Seine-Saint-Denis), noting, “I’ve observed a price variance that can range from 5% to 20%, depending on the property.” She acknowledges the potential challenges of renovation, especially without a construction background.
For the house priced at 215,000 euros, an additional investment of 70,000 euros in renovations is anticipated. Selvi Turkan, the real estate agency director overseeing the sale, emphasizes the potential these neglected homes hold: “They represent a genuine opportunity for both first-time buyers and investors. Many owners are unable to undertake the necessary renovations and would rather sell at a lower price.” Thus, savvy buyers should remain vigilant, as a recent survey revealed that over a third of these homeowners have no plans to renovate their properties.