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Decline in number of mortgages largest since 2018
Utrecht, November 23, 2022
Mortgage sales fall to €38.1 billion in the third quarter of 2022. For the first time since the housing crisis in 2013, a decline in mortgage sales can be seen between the second and third quarter. The number of mortgages closed has also declined, mainly due to a sharp drop in refinancing. The number of mortgages in the purchase market this year is down from 2021. This which combined with a decline in housing supply indicates a shrinking housing market.
Fewer mortgages closed
The number of mortgages closed in the third quarter this year reached the lowest point since 2018. Compared to the second quarter of 2022, the number of mortgages closed decreased by 16.4%. Also compared to the same quarter in 2021, a tenth (11.7%) fewer mortgages were taken out. This drop in the number of mortgages closed is a notable shift in the trend we are used to observing. Normally, decreases in numbers occur between the fourth quarter of the previous year and the next quarter the following year, but a decrease can now already be seen mid-year.
Trend reversal in mortgage sales due to mid-year decline in sales
There has also been a decline in mortgage sales. For the first time since the housing crisis in 2013, there has been a decline in mortgage sales between the second and third quarters. This year in the third quarter, mortgage sales amounted to €38.1 billion where in the second quarter they were €45.6 billion. Compared to the second quarter this year, third quarter sales are 16.6% lower. Also compared to the third quarter of 2021, this is a drop of 7.8%. If high interest rates continue and the housing market stalls further, the mortgage market in 2022 will be lower than in 2021.
This sharp decline in mortgage sales in the third quarter of 2022 is primarily due to the strong drop in mortgage sales in the refinancing category compared to the previous quarter. "Where last year we saw a steady increase in mortgage sales among those refinancing, we are now seeing a sharp decline. This is caused by interest rate increases and uncertainty in the economy, such as strong inflation," explains Chris van Winden, director of Banking at IG&H.
Rising interest rates, plateauing house prices
There are fewer refinancing closures this quarter because of rising interest rates. In the third quarter of this year, the number of mortgages closed for this type of closing fell by 39.1%. "This decrease is also partly explained by the fact that in the previous quarter, there was still an increase taking place among this group. For example, they were still able to benefit from a relatively low interest rate and thus reducing their monthly costs," Van Winden adds. Where interest rates are rising, house prices are leveling off. Compared to the third quarter of 2021, homes increased in value by more than one-tenth (11.2%) in the third quarter this year. Compared to the second quarter of 2022, the price increased by 0.7%. This is according to the WOX from Calcasa. This shows that house prices are no longer rising as extremely as before but are beginning to level off.
ABN AMRO takes over second place from Rabobank
In the third quarter of 2022, banks increased their market share in number of mortgages and remained the largest type of mortgage lenders. This can also be seen in the shifts on the list of top providers. ING, Rabobank and ABN AMRO can be found in the top three once again. ING remains in first place, while Rabobank gives up a spot and drops to third place. Obvion is the biggest climber this quarter (+1.7%), ahead of ABN AMRO (+1.4%) and Syntrus Achmea Hypotheken (+0.8%). The latter enters the top 10 largest providers.
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Kind regards,
Chris van Winden
Director Banking
T: +31 6 29 56 52 76
Authors & data analysis of the IG&H Mortgage Update:
Steven Moerkens
Veerle Willemsen