Dutch Mortgage Applications Fall as Rates Hit Two-Year High

Buyers Pull Back as Rates Hit Two-Year High
According to figures from the Hypotheken Data Netwerk (HDN), which processes nearly all mortgage applications in the Netherlands, a total of 40,692 applications were submitted in April — down 11 percent compared to the same month last year. The main driver behind the drop is the steady climb in mortgage rates. Average 10-year fixed rates are now hovering around 4 percent, the highest they've been in over two years. That kind of increase makes a real difference in monthly payments, and many buyers are simply choosing to wait.

The share of applications coming from homebuyers slipped from 59 percent to 57 percent year-on-year. First-time buyers felt the pinch the most. They submitted 11,762 applications in April, down from more than 14,000 the previous year. Existing homeowners looking to move also became noticeably more cautious. HDN noted that many people had rushed to lock in mortgages in March, fearing rates would rise even further. As tensions in the Middle East escalated and rates continued to climb, that momentum came to a halt.

Luxury Homes Gain Ground While New Builds Lose Share
Despite the overall decline, there was one area that actually grew — high-end properties. Applications for homes priced above 750,000 euros climbed from 12 percent to 14 percent of total filings. In real numbers, that segment rose from roughly 5,650 to nearly 5,900 applications. Meanwhile, homes in the 300,000 to 450,000 euro range, once the most active segment, dropped from 36 percent to one-third of all applications.

New-build homes continued to lose ground. Their share of applications fell to just 5 percent in April — or 2,183 filings — down from 6 percent a year earlier. This decline has been visible since January and shows no signs of reversing. Analysts at ING echoed these concerns last week, pointing to slightly higher mortgage rates and a more cautious mood among buyers as modest but real drags on demand. The bank also forecast that house prices in the Netherlands, which had seen years of record growth, are likely to plateau for the remainder of the year.