“Cooling” housing market means more opportunities for young people, mortgage firm says

It has become slightly easier for young real estate buyers to snatch up a home now that the housing market seems to be cooling down somewhat. The number of mortgage applications from home buyers up to the age of 35 increased by 17 percent this year compared to the last five months of 2021, reports mortgage advisor De Hypotheker.

The increase in the number of mortgage applications is a clear reversal from previous quarters, when the number of applications in this age group fell sharply. Young home buyers will not only find more opportunities in rural areas, such as Flevoland, Noord-Brabant, and Zeeland, but also in the urban Randstad region, especially in Zuid-Holland and Utrecht, the company said.

The total number of mortgage applications for the purchase of a home increased by 9.5 percent since the beginning of this year, a lower overall rate than the increase seen in the under-35 age group. This indicates that the housing market is gradually starting to cool down, according to De Hypotheker. Another sign is that home prices are 2 percent lower than at the end of 2021, breaking the trend seen in recent years. Additionally, the mortgage interest rate rose by almost 2 percent compared to January, which results in a reduction in the mortgage home purchasers can obtain.

However, rising mortgage interest rates is also having a positive effect. Because first-time buyers face less competition on the housing market, they do not have to bid far above the asking price as often. The tense labor market is also a helping hand for starters. Young home buyers can find a job more quickly, which also increases the prospects for affordable housing.

The demand for affordable housing, on the other hand, remains strong. The average mortgage amount in the group up to 35 years has increased by 10 percent since the beginning of this year compared to a year ago. For young home buyers, a mortgage currently amounts to an average of 318,000 euros.

Despite the positive developments for young home buyers, it is crucial that starters continue to receive support when buying a home, according to commercial director Menno Luiten of De Hypotheker. He says it is very important that additional opportunities are created to enter the housing market or to stimulate the flow of people.