Spain Monthly Market Review - March 2024

Spain's economy has continued its recovery, with GDP growth of 2.8% in 2023 and steady job creation. However, inflation remains elevated at around 5%, putting pressure on consumer spending and the housing market.

Home prices in Spain have risen steadily, with the national home price index up 7.2% year-over-year as of January 2024. This price growth has been driven by limited inventory and strong demand, especially in major cities like Madrid and Barcelona.

Home sales volumes have increased modestly in 2024 so far, up around 3% compared to the same period in 2023. However, activity remains below pre-pandemic levels as affordability challenges weigh on buyers.

Mortgage rates in Spain have risen along with the European Central Bank's benchmark rates, reaching around 4.5% for a 20-year fixed loan. This has further strained housing affordability, especially for first-time and younger buyers.

Economists forecast the Spanish housing market will see gradual improvement in 2024, with sales and price growth expected to continue at a moderate pace. However, high inflation, rising interest rates, and limited inventory will likely keep the market from a robust recovery in the near term.

Overall, the 2024 Spanish real estate landscape is characterized by ongoing price appreciation, slowly increasing sales, and persistent affordability pressures for many prospective homebuyers.