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California housing affordability crunch eases slightly

Posted by Mehran Aram on Thu, Nov 29, 2018 @ 05:11 AM

Flat home prices and stable interest rates helped make housing more affordable in the Golden State, says the California Association of Realtors. The trade group reported this week that the percentage of home buyers who could afford to purchase a median-priced existing single-family home in California in the third-quarter climbed one percentage point to 27 percent in the second quarter of 2018.

Based on the current median home price of $588,530, buyers would need an annual income of $125,540 to qualify for most conventional loan products. Should home price appreciation continue to slow, and the strong economy continue to result in rising wages, the affordability factor should see more improvements.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.875 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.5 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: California, homebuyers, California Association of Realtors, Mortgage rates, home affordability, Conventional Loans

Millennials showing preference for conventional loans

Posted by The Aramco Group on Tue, Oct 16, 2018 @ 14:10 PM

Younger homebuyers turned more towards conventional home loans in August, so much so that it drove Ellie Mae’s Millennial Tracker to a three-year high. 69 percent of home loans taken out by Millennials in August were conventional loans - up 64 percent from August 2017 and the highest rate since February 2015. FHA loans, another popular option among first-time buyers, accounted for 27 percent of all closed loans during the month, down 32 percent from last year.

Lenders are competing for this growing segment of the home buying population including offering a variety of low-down payment options. Millennials have slowly grown to become a larger share of homebuyers and in part responsible for increases in the overall homeownership rate nationwide.

As with other age groups, millennial males represented most of the loans two-to-one with 61 percent of the total, while 32 percent were women. The remainder did not specify a gender.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Millennials, home buying, first-time buyers, Mortgage rates, Home Loan, Conventional Loans