Mortgage applications up 16% as interest rates fall, wages rise

The number of mortgage applications, including refinancings and additions, increased by 16 percent in the first quarter of 2024 compared to the same quarter last year. Applications for the purchase of a home increased by 19 percent, De Hypotheker reported on Wednesday. Half of these applications were from young home buyers under the age of 35.

“The increase in the total number of mortgage applications is mainly the result of the slightly falling mortgage interest rate, which means that home buyers can take out a higher mortgage on balance,” said Mark de Rijke, commercial director of De Hypotheker. Higher incomes also played a role in this. “This is a signal that the recovery in the housing market is continuing.”

The Dutch realtors’ association NVM recently reported that home prices increased 9 percent in the first quarter compared to a year earlier. Homebuyers also faced more competition as supply declined, and overbidding was again common practice. Over half of the homes were bought above the asking price.

De Hypotheker sees that reflected in its mortgage figures. In the first quarter, the average mortgage amount for buying a home rose 7 percent to 337.000 euros. There was an increase in all provinces except Zeeland, where the average amount dropped by 3 percent.

The average mortgage amount increased the most outside the Randstad - Drenthe (+13%), Gelderland (+9%), and Friesland (+7%). But the amount was still highest in Noord-Holland (384,000 euros) and Utrecht (363,000 euros).

“The housing market remains tight and we see a sharp increase in the number of overbids,” De Rijke said. “We expect that the average mortgage amount will increase further in the coming year due to rising house prices.”