Rising mortgage interest rates making homebuyers hesitate

Homebuyers are hesitating now that mortgage interest rates are rising due to the war in the Middle East, De Hypotheker observed. The mortgage amount did not rise last quarter for the first time in three years. The number of applications also remained the same in the first quarter as in the same period a year earlier.

In the first quarter of this year, the average mortgage amount remained unchanged at just over €357,000. “The figures for the first quarter show that the housing market has entered a phase of stabilization,” said Mark de Rijke, commercial director of De Hypotheker. Compared to quarter four of last year, the number of applications even decreased by 7 percent.

First-time buyers still account for over half of mortgage applications at 54 percent, but home movers are gaining ground, the mortgage advisor said. This may be related to the fact that movers can transfer their lower mortgage interest rates to a new home. Young movers applied for 16 percent more mortgages, while first-time buyers between the ages of 25 and 35 actually submitted fewer applications.

De Hypotheker observed significant regional differences. The housing market is developing less and less as a unified whole and more as a collection of regional markets, De Rijke said. For instance, the average mortgage amount rose by 9 percent in Limburg and Groningen, while it decreased by 13 percent in Zeeland.

The number of applications also varied sharply by province. De Hypotheker sees the market cooling down in Utrecht and Flevoland, where the number of applications fell by 17 percent. In contrast, the housing market in Zeeland and Groningen was more active, and the number of applications increased by 30 and 21 percent, respectively.