ECB: euro area mortgage demand weakens

Demand for housing loans in the euro area weakened considerably in the third quarter of 2026, according to findings released on 27 October in the European Central Bank (ECB)'s latest bank lending survey. A net 27% of banks reported weaker demand compared with the previous quarter, a steeper decline than the net 12% the banks had expected.

What does 27% mean?

The figure is a net percentage of banks' responses about the direction of demand; it does not mean that the number or total value of mortgages issued fell by 27%. The comparable net decline was 15% in the second quarter. According to the ECB, higher interest rates were the main driver, followed by weaker consumer confidence and worsening housing-market prospects.

Lending conditions

According to the survey, approval criteria for housing loans were broadly unchanged in July–September, while banks tightened standards for company and consumer loans. They expect stricter mortgage lending criteria in the final quarter of the year. The survey ran between 21 September and 6 October and covered 159 banks in the euro area.

The findings describe banking trends across the euro area, not a separate dataset for Bulgaria or a forecast of specific mortgage rates in the country. Based on the survey, banks expect demand for housing loans to weaken further in the fourth quarter.

Sources: ECB – Bank Lending Survey, Q3 2026; Reuters, 27 October 2026.

Photo: Ming Huang / Unsplash (Unsplash License). Illustrative residential buildings, not tied to a particular country covered by the survey.