French Mortgage Rate Stagnation Sparks Market Uncertainty

France's mortgage market has hit an unexpected plateau. After plunging from 4.5% in late 2023 to 3% last spring, borrowing costs have frozen in place for three consecutive months. This stagnation defies both market expectations and the European Central Bank's more accommodative monetary stance.

Banking institutions are prioritizing margin protection over market stimulation, reflecting broader economic anxieties. The pause comes at a critical juncture—just as transaction volumes for existing homes showed signs of recovery. Prospective buyers now face recalculated affordability thresholds, while investors reassess long-term real estate positions.

Market observers note the divergence between credit conditions and property demand. Where analysts anticipated sustained rate declines to fuel a market rebound, lenders have instead deployed strategic restraint. This financial gridlock reveals structural tensions beneath France's tentative housing recovery.