Spain housing market logs record mortgages and rising prices

Spain’s housing market ended the summer with more sales, the highest mortgage volume since 2010 and used-home prices up for a 70th straight month. Higher borrowing costs and a persistent supply deficit are keeping pressure on buyers even as demand stays strong.

Why it matters: - Spain’s housing market is still moving, but at a higher cost to buyers. - Record mortgage activity and persistent price gains show demand has not eased, even as financing costs rise. - The trend affects households reviewing variable-rate loans, first-time buyers and sellers trying to time the market.

What happened: - Spain signed 45,907 mortgages in June, the highest monthly total since 2010. - Home sales reached 59,288 in June, up 1.6% from a year earlier and the strongest June reading since 2007. - The June sales total ended a five-month streak of declines. - The data cited in the release comes from the INE, Fotocasa and Spainhouses.net records.

The details: - Mortgage lending rose 17.5% year over year in June, topping €8.188 billion. - The average mortgage size climbed to €178,365, about €10,000 more than in June 2025. - Fixed-rate loans accounted for 61.7% of mortgages, with an average rate of 2.89%. - Variable-rate loans carried an average rate of 3.07%. - Spain’s provisional Euribor average for September opened at 3.029%, above 2.952% in August and 2.172% a year earlier. - Used-home prices rose 15.6% year over year in August to €3,166 per square meter. - That marks 70 straight months of annual price increases. - A typical 80-square-meter resale home now costs €253,270, about €34,000 more than a year earlier. - Murcia posted the largest annual price increase at 28.8%. - Cantabria followed with an 18.5% rise, and the Valencian Community rose 17.1%. - The Balearic Islands remained the most expensive market at €5,443 per square meter. - Madrid ranked close behind at €5,431 per square meter. - Extremadura was the cheapest region at €1,380 per square meter. - Castilla-La Mancha followed at €1,436 per square meter. - From January to June, sales were still 2.6% below 2025 levels. - New-build transactions rose 6.3%, while existing-home sales increased just 0.3%. - More than 90% of sales were for market-rate housing. - Subsidised housing sales fell 11.8%. - Foreign buyers made up 14% of property sales in Spain from January to May 2026, based on Spainhouses.net data. - The foreign-buyer share rises to more than 30% in Mediterranean provinces and the islands. - International demand is especially strong in Málaga and Alicante, including Marbella, Estepona, Fuengirola, Benalmádena, Torrevieja, Orihuela, Pilar de la Horadada and Calpe. - British buyers led with 13.59% of foreign demand, followed by German buyers at 11.76%, French buyers at 10.78%, American buyers at 10.71% and Dutch buyers at 8%. - Foreign buyers are typically searching with budgets between €180,000 and €450,000. - Villas with pools and highly energy-efficient homes remain the preferred property types.

Between the lines: - The market is being pulled in two directions at once: affordability is worsening, but financing volume and investor demand are still high. - The Euribor’s rise weakens one of the main advantages variable-rate borrowers had in recent years. - The shortage of subsidised housing suggests the weakest part of the market is not getting enough relief. - A supply deficit of around 600,000 homes is likely to keep upward pressure on prices, even if rate changes slow demand. - The release frames the current environment as one where sales can improve without making housing more accessible.

What's next: - The release points to three near-term variables: the 2027 General State Budget, a decree on seasonal rentals and tenant protections, and the ongoing housing supply gap. - Variable-rate borrowers due for review this fall or next will face higher payments if the Euribor stays elevated. - Sellers may continue to benefit if mortgage access remains available and foreign demand holds up. - Housing prices are expected to keep rising, though the pace will depend on interest rates and policy changes.

The bottom line: - Spain’s housing market is ending summer with strong demand, record borrowing and faster price growth — but affordability is getting worse, not better.