What is the reason why first-time home loan interest rates have hit new lows in many places?
The recent decline in home loan interest rates is the result of policy guidance and market supply and demand. The regulatory authorities have established a dynamic adjustment mechanism for first-home loan interest rate policies, further releasing policy signals to encourage qualified cities to moderately lower first-home loan interest rates. The month-on-month decline in house prices narrowed slightly in January, and the real estate market in some cities picked up. However, since the beginning of the year, new home sales data in 30 large and medium-sized cities have continued to be at low levels, and early loan repayments have begun to occur in various places. The mortgage market is tilted in favor of lenders, which is why some banks have taken the initiative to lower mortgage interest rates.
Recently, first-home loan interest rates have dropped significantly in many places. According to RealData statistics, the average mainstream interest rate in 100 cities for the first time in February was 4.04%, a month-on-month decrease of 6BP. After four months of being basically stable, it dropped significantly again, with the absolute level hitting a new low since 2019. The average interest rate for second-home loans was 4.91%, unchanged from the previous month. In addition, first- and second-home loan interest rates fell by 143BP and 84BP respectively in February.
Specifically, first-home loan interest rates in second-tier cities dropped the most month-on-month. Mortgage interest rates in first-tier cities were the highest in February, with an average of 4.6% for first-time buyers and 5.13% for second-time buyers, both unchanged from the previous month. The average interest rate for first-time home loans in second-tier cities was 3.99%, 8BP lower than the previous month. The average interest rate for first-time home loans in third- and fourth-tier cities was 4.04%, down 4BP from the previous month. Interest rates in second-, third- and fourth-tier cities were 4.91% and 4.9% respectively, the same as last month.
Recently, the latest LPR quotation has been released. As the "anchor" for mortgage interest rate pricing, the LPR (loan prime rate for loans with a maturity of more than five years) remained unchanged in February at 4.3%.