Explore the surge in Spain’s residential real estate market as mortgage signings rise by 61% and interest rates fall to 3.12% in October.

The Spain’s residential real estate market is experiencing a remarkable resurgence, as evidenced by a staggering 61% increase in the signing of mortgages for homes, culminating in over 51,000 loans in October alone. This surge marks a significant milestone, with the average interest rate for these mortgages dipping to 3.12%, a slight decrease from the 3.14% recorded in September. This figure represents the lowest interest rate since April 2023, when it stood at 3.08%.

According to data released by the National Institute of Statistics (INE), the number of mortgages constituted on homes soared by 60.8% in October compared to the same month in the previous year, reaching 51,535 loans—the highest figure since September 2010. This upward trajectory in mortgage signings has persisted for four consecutive months, reflecting a robust recovery in the housing market.

Moreover, the average amount of mortgages constituted on homes rose by 7.3% year-on-year in October, reaching 150,556 euros. The total capital lent skyrocketed by an impressive 72.5%, amounting to 7,758.8 million euros, marking the highest level in 16 years. This surge can be attributed to the European Central Bank’s (ECB) recent reductions in interest rates, which have positively influenced inflation data and the evolution of the Euribor.

In terms of mortgage structure, 37.4% of home loans were established at a variable rate, while a substantial 62.6% were fixed-rate mortgages—the highest percentage since March 2023. The initial average interest rate for fixed-rate mortgages was recorded at 3.32%, while variable-rate mortgages stood at 2.83%. Month-on-month comparisons reveal a striking 24.8% increase in mortgages on homes from September to October, alongside a similar growth in the capital loaned.

Geographically, Andalusia (10,267), Catalonia (9,002), and Madrid (8,405) emerged as the regions with the highest number of mortgages constituted on homes in October. Notably, all autonomous communities reported an increase in mortgage signings compared to the same month in the previous year, with Asturias leading the charge at an astonishing 140.1% increase, followed closely by Aragon (122.1%), Galicia (89.9%), and Cantabria (88.9%).

Conversely, the Canary Islands (1%), Navarre (20.3%), Catalonia (54.3%), and Andalusia (56.3%) exhibited more moderate advances, with their increases falling below the national average of 60.8%. This nuanced landscape of the Spain’s residential real estate marketunderscores a dynamic interplay of economic factors, consumer confidence, and regional variations, painting a complex yet optimistic picture for the future of home financing in Spain.