On one hand, the market remains weak. On the other, mortgage volumes are near record highs. What is going on here?

The housing market continues to yield seemingly contradictory data.

On one hand, the number of transactions remains relatively low.

On the other, mortgages totaling approximately NIS 10.9 billion were taken out in August—a very high figure.

And now, another fact has emerged: The average mortgage amount actually decreased, falling from NIS 1.117 million in July to NIS 1.061 million in August. At the same time, the mortgage delinquency rate dropped to 0.61%. 

So, how does a weak market generate such a high volume of mortgages?

One reason is that a mortgage taken out today does not necessarily correspond to an apartment purchased today. In recent years, many apartments were sold under deferred-payment schemes, and some buyers are only now reaching the stage where they need to take out a mortgage and pay the remaining balance. Consequently, today’s mortgage figures partly reflect yesterday’s transactions.

In my view, looking at a single data point is not enough to declare a shift in the market. To see a genuine recovery, I would want to see several things happening simultaneously: more transactions, stronger demand, and mortgage activity that supports those transactions. 

Sellers: You still need to price correctly based on today’s market, rather than expecting buyers to return "any moment now."

Buyers: Falling interest rates are improving the financing environment. Combined with the large supply, this is certainly a good time to re-evaluate your purchasing power.

*Update from Yaron Goldberger, Real Estate Expert at HaBayit Shelanu*