The average mortgage interest rate in France declined for almost a decade before increasing dramatically in 2022. As of January 2023, new housing loans had an average interest rate of 2.2 percent - about twice higher than the year before. This trend was observed in most countries across Europe.

How has the mortgage reacted to the interest rate hike? The value of new mortgage lending in France decreased notably in the third quarter of 2022, possibly as a response to the higher lending costs. Additionally, soaring inflation has also played a major role in decreasing home buyer sentiment by eroding savings and the purchasing power of prospective home buyers.

How have house prices reacted to the change? Though house prices have steadily increased since 2016, the growth was the highest in the third quarter of 2021 when the house price index jumped from 122 to 134 index points. In 2022, the increase of residential real estate prices slowed down, with a forecast to turn negative in 2023. According to a July 2022 forecast, house prices are set to decline by four percent in 2023.

Residential mortgage lending in Germany plummeted in 2022, amid an increase in mortgage rates. With interest rates gradually increasing as a response to the rising inflation, the mortgage market has cooled: In October 2023, the value of new mortgage loans stood at about ** billion euros, down from almost ** billion euros two years ago. During the observation period, 10-year fixed rate mortgages accounted for nearly half of mortgage lending, followed by 5 to 10 year fixed rate mortgages. More information on the Mortgage market in Western European countries can be found here.

House prices grew year-on-year in most states in the U.S. in the third quarter of 2024. The District of Columbia was the only exception, with a decline of ***** percent. The annual appreciation for single-family housing in the U.S. was **** percent, while in Hawaii—the state where homes appreciated the most—the increase exceeded ** percent. How have home prices developed in recent years? House price growth in the U.S. has been going strong for years. In 2024, the median sales price of a single-family home exceeded ******* U.S. dollars, up from ******* U.S. dollars five years ago. One of the factors driving house prices was the cost of credit. The record-low federal funds effective rate allowed mortgage lenders to set mortgage interest rates as low as *** percent. With interest rates on the rise, home buying has also slowed, causing fluctuations in house prices. Why are house prices growing? Many markets in the U.S. are overheated because supply has not been able to keep up with demand. How many homes enter the housing market depends on the construction output, whereas the availability of existing homes for purchase depends on many other factors, such as the willingness of owners to sell. Furthermore, growing investor appetite in the housing sector means that prospective homebuyers have some extra competition to worry about. In certain metros, for example, the share of homes bought by investors exceeded ** percent in 2024.

The private mortgage insurance (PMI) market is experiencing robust growth, driven by a combination of factors. Rising home prices and persistently low interest rates continue to fuel demand for mortgages, particularly among first-time homebuyers who often require PMI to secure financing with a lower down payment. The increasing adoption of digital and direct channels for mortgage applications streamlines the process, leading to higher insurance penetration. Furthermore, the market is diversifying beyond traditional borrower-paid PMI (BPMI), with lender-paid PMI (LPMI) gaining traction due to its potential to reduce upfront costs for borrowers. While regulatory changes and economic downturns can pose challenges, the long-term outlook for the PMI market remains positive, fueled by demographic shifts and sustained demand for homeownership. Key players like Arch Capital Group, Genworth Financial, and MGIC are well-positioned to benefit from this growth, leveraging their expertise in risk assessment and underwriting. Geographic expansion into emerging markets, particularly in Asia and Latin America, presents further growth opportunities as these regions experience rising urbanization and increasing demand for mortgages. The diverse segmentation of the market, including variations in premium structures (single vs. split premium), allows for targeted product offerings to cater to specific borrower needs and risk profiles. Competitive landscape is likely to see further consolidation, as larger players strive to achieve economies of scale and expand their market share. The forecast period (2025-2033) projects sustained growth for the PMI market, albeit at a potentially moderating CAGR compared to the historical period. This moderation reflects a likely stabilization in interest rates and home price appreciation, and increased competition among providers. Nevertheless, the continuous increase in global home ownership, driven by population growth and changing demographics, is expected to offset this moderation, ensuring a continued, albeit possibly slower, expansion of the market size. The geographic distribution of this growth will vary, with developed markets like North America and Europe seeing continued growth, while emerging markets in Asia and Latin America exhibit potentially faster rates of expansion due to higher growth rates in mortgage originations. This dynamic necessitates agile strategic responses from market participants, requiring adaptation to evolving regulatory landscapes and the deployment of innovative risk management technologies. The ongoing development of predictive modelling and data analytics will likely play a major role in shaping the competitive landscape and facilitating greater accuracy in risk assessment.

This indicator summarises the types of policy measures towards affordable housing that exist in countries that responded to the 2021, 2019 and 2016 OECD Questionnaire on Affordable and Social Housing (QuASH). 1 This indicator also provides an overview of the different levels of government involved in the administration and funding of housing policy measures. Further details on the different policy measures can be found in other indicators in the OECD Affordable Housing Database section, “Public policies towards affordable housing.” Surveyed policy measures here included have been classified as follows: Support for homeownership and homeowners:  Subsidies, subsidised mortgages and mortgage guarantees to homebuyers to facilitate home ownership: These measures include one-off grants for the purchase of a residential dwelling, covering part or all the value of the dwelling. They are often reserved for first-time homebuyers with income levels below a given threshold who purchase dwellings with certain characteristics. These also include subsidised mortgages provided by or subsidized by the government, for the purchase of a residential dwelling; measures can also consist of down payment assistance or mortgage guarantees provided by the government (see indicator PH2.1).  Mortgage relief for over-indebted homeowners: Subsidies and measures to avoid foreclosure on residential dwellings that are owned by households in financial distress. These include subsidies for mortgage payments and payment of arrears, postponement of payments, refinancing mortgages, and mortgage-to-rent schemes (see indicator PH2.1).  Tax relief for homeowners: Tax deductions or tax credits granted to individual taxpayers for the purchase of their main residence. These may include tax relief measures such as mortgage tax relief or tax relief to first-time homebuyers for the costs (e.g. legal fees, disbursements and land transfer taxes) associated with the purchase of a home (see indicator PH2.2).  Support to finance housing regeneration: Tax deductions, tax credits and/or grants to finance the regeneration of existing residential dwellings (e.g. energy efficiency improvements, quality upgrades, etc.) (see indicator PH7.1).

Due to interest rates decreasing in recent years, mortgages in the United Kingdom have become overall more affordable: In 2007, when mortgages were the least affordable, a home buyer spent on average **** percent of their income on mortgage interest and *** percent on capital repayment. In 2019, the year with the most affordable mortgages, mortgage interest accounted for *** percent and capital repayment was **** percent of their income. As interest rates increase in response to the rising inflation, mortgage affordability is expected to worsen. Though below the levels observed before 2007, the total mortgage repayment between 2022 and 2026 is expected to exceed ** percent of income.

Homeownership provides financial and emotional security and often represents an individual or family's most significant investment. House Construction industry contractors build single-unit (detached) dwellings or renovate and repair existing houses. Australia's solid population growth underpins the industry's performance. Still, a long-term shift in housing preferences towards constructing high-density apartments and townhouses has eroded revenue. House construction surged to a record peak in 2021-22 despite the pandemic restrictions and supply chain blockages impeding progress on construction projects. Homebuyers responded to record-low mortgage interest rates, favourable bank lending practices and the stimulus from the Federal Government's HomeBuilder scheme by unprecedented investment in new single-unit house construction and home renovations. As the housing market heated up, builders faced challenges juggling heavy workloads while dealing with supply bottlenecks, skill shortages and rising costs. The industry's revenue performance has taken a hit in recent years as housing investment slumped following the hike in mortgage interest rates as the RBA lifted official cash rates to quell inflation. Meanwhile, the HomeBuilder scheme wound down with the completion of funded projects. Industry revenue is expected to fall by 2.9% in 2024-25 and decline at an annualised 1.5% over the five years through 2024-25 to $76.1 billion. The industry's profit margins have suffered, partly reflecting the supply chain disruptions during the housing boom stemming from the COVID-19 restrictions. These bottlenecks delayed construction projects and inflated input prices for building materials, fuel, capital equipment and skilled labour. Fixed-price contracts and escalating input costs have pushed many homebuilders to the brink. Mounting population pressure and some easing in mortgage interest rates will support the moderate recovery in the industry's performance. Homebuilders may also derive some support from a commitment to construct 1.0 million new homes under the National Housing Accord. Still, much of the focus of residential building construction will shift towards high-density apartment and townhouse developments rather than single-unit houses. Industry revenue is forecast to climb at an annualised 1.4% to $81.6 billion through the end of 2029-30.

According to a survey conducted among 2,000 adults in the United Kingdom (UK), in December 2023, people were generally pessimistic about the prospects of buying a residential property. Asked whether they think now is the time to buy, approximately 16 percent of respondents said they agree, while 41 percent said they disagree. In contrast, between June 2020 and September 2021, the opposite trend was observed. Some of the reasons had to do with policies introduced in response to the coronavirus (COVID-19) pandemic, such as freeze of the income tax thresholds, extension of the furlough scheme, stamp duty holiday, the mortgage guarantee scheme, and the low mortgage rates.

The monthly value of new mortgage lending fluctuated between 14 billion euros (January 2017) and 38 billion euros (September 2017). In May 2023, the value of mortgage loans originated amounted to 14.1 billion euros, down from 24.7 billion euros during the equivalent month in 2022. One of the main reasons for the decline in new lending was the increase in mortgage rates in response to soaring inflation. With borrowing notably more expensive, homebuyer sentiment decreased and buyers were less likely to take out a loan.