The interest rates on real estate loans in France continue their downward trend, which began in 2024. Average rates are now around 3% for 20 years and 3.10% for 25 years, offering more favorable borrowing conditions for buyers.
This drop in rates has contributed to a significant recovery in the residential real estate market. In the fourth quarter of 2024, sales of existing homes increased by more than 8% compared to the previous year, contrasting with a sharp decline in 2023 and early 2024. First-time buyers particularly benefit from this drop in prices and rates, making homeownership more accessible.
At the same time, investors are showing renewed interest, especially in areas with strong rental demand. Banks, for their part, have loosened credit restrictions and launched aggressive marketing campaigns (including TV advertisements) to attract new clients. Loan conditions have been relaxed, and financial institutions have been multiplying their operations in recent days.
My opinion: Projections for 2025 remain optimistic, with rates expected to stabilize between 2.60% and 2.80% for most borrowers. However, uncertainties persist due to political instability in France and the U.S., as well as tensions in the bond markets, which could push rates higher. The introduction of tariffs on imports could lead to rising inflation in the U.S., which in turn could drive interest rates up. Borrowers are therefore advised to remain vigilant and take advantage of current opportunities to finalize their real estate projects.
Published by: Jean-François Sprecher, Capifrance real estate advisor specializing in the purchase and sale of resale properties, life annuities, and business assets, as well as rentals in Mâcon, Bourgogne, and Ain.
