Mortgage amounts are currently rising faster than home prices according to The Mortgage Bankers Association. The average purchase loan amount has risen over 30% since 2011 up to nearly $300,000 and is now at a higher level than before the housing market crash. One possible explanation for the gap between the rates of change for mortgage amounts and home prices, according to the same association, is that the market for larger homes has rebounded more quickly, swinging average mortgage amount upwards. The stock market’s bull run for the last six years may have helped those invested re-enter the market for more expensive homes while middle and low income households may still have moderate credit after the recession or may otherwise still be intimidated from applying for mortgages. Meanwhile, with the consumer-price index rising 0.2 percent in February, its first gain in four months, the Fed is likely to view this as positive economic news and continue its uptick in interest rates over the next year. Currently though, 30-year fixed rates average 3.625 percent while 15-year rates are closer to 3 percent.
For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.