Spain home sales and mortgages fall in July as Euribor rises

Spain’s housing market lost momentum in July, with home sales down 5.1% and residential mortgages down 3.5% year over year, according to the National Statistics Institute. The data point to a softer summer market, even as average loan sizes hit a record and the Euribor climbed for a third straight month.

Why it matters: - Spain’s housing market is still active, but July showed a clear cooling after a strong first half. - The slowdown matters most for first-time buyers and lower-income households, because subsidised housing fell faster than the wider market. - Rising Euribor levels will also affect borrowers on variable-rate mortgages at their next reset.

What happened: - The National Statistics Institute said July home sales fell 5.1% from a year earlier to 61,417 transactions. - Residential mortgages fell 3.5% year over year to 43,372 and dropped 5.5% from June, the sharpest monthly decline since 2024. - Home sales rose 3.6% from June, which reflects a typical seasonal lift from deals signed before the summer break. - Year to date, home sales from January through July were down 3.0% compared with the same period in 2025. - Mortgages from January through July were still up 5.4% year over year.

The details: - Subsidised housing sales fell 14.4% from a year earlier, more than three times the 4.4% decline in free-market housing. - Resale homes made up 78.4% of all transactions. - New-build homes accounted for 21.6% of sales and did not grow enough to offset weaker resale activity. - The average mortgage amount reached a record €180,785, up 10.9% from a year earlier. - The average interest rate rose to 3.01%, crossing 3% for the first time in 18 months. - Fixed-rate mortgages remained the most common product, representing 62.3% of deals for the eleventh straight month. - When June and July are combined, sales were down just 1.9% from the same period in 2025, while mortgages were up 3.4%. - The 12-month Euribor provisional average for September closed at 3.223%, up from 2.954% in August. - The Euribor also rose in June, July and August, marking three consecutive monthly increases.

Between the lines: - The market is not freezing. The data show a slowdown from unusually strong comparisons in 2025. - The gap between falling transaction counts and rising loan sizes suggests buyers who do close are borrowing more. - The uneven regional results show that Spain’s housing market is moving in different directions depending on local demand and supply. - The strain on subsidised housing stands out in a country with an estimated supply deficit of around 600,000 homes.

What's next: - Variable-rate borrowers facing a reset are likely to see higher monthly payments because of the recent Euribor increases. - The 2027 General State Budget and the decree regulating seasonal rentals are expected to stay on the sector’s agenda through the end of the year. - The key question for the rest of 2026 is whether July was a temporary pause or the start of a broader lending slowdown.

The bottom line: - Spain’s housing market is still moving, but July showed weaker sales, softer mortgage demand and higher borrowing costs at the same time.