ARAMCO Report - The Mother of ALL Mortgage Blogs!

Real estate history repeats itself

Posted by Mehran Aram on Wed, Jul 17, 2019 @ 05:07 AM

Wage increases not keeping up with the rising cost of living has been plaguing the housing market for several years, but a new study of historical trends shows that this dilemma has been frustrating buyers for decades.

A report from Clever Real Estate shows that median home prices have surged 121 percent nationwide since 1960 while household income increased just 29 percent. Renters have also felt the pain of rising prices with a 72 percent increase since 1960.

Homes in the West have felt this problem more acutely as median home prices have risen 195 percent over the past five decades, compared to wages rising only 26 percent over the same time period.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.00 percent and 15-year rates are near 3.375 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: Housing Market, Wages, Renters, household income, home buyers, median home price, Cost of Living, Historical Home Prices

Fannie Mae: Americans upbeat about economy

Posted by The Aramco Group on Sun, Oct 14, 2018 @ 10:10 AM

Despite rising interest rates, Americans feel generally positive about the state of the economy, housing and their own finances. Although Fannie Mae’s Home Purchase Sentiment Index fell 0.3 percent in September, the decline was not enough to erase the 1.5 percent gain from August.

Last month’s decline was in part due to a three-percentage point drop in the number of consumers who reported that their household income was higher than it was a year ago. However, 53 percent of respondents to the poll say they expect their income to improve in the coming year.

Even in the face of higher borrowing costs, the net share of Americans who say now is a good time to buy a home increased five percent. Today, 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: Housing Market, U.S. economy, Fannie Mae, Mortgage rates, household income

Home affordability at 10-year low

Posted by The Aramco Group on Wed, Oct 10, 2018 @ 09:10 AM

The American dream of owning a home is more expensive that it’s been at any time in the past decade. A new report from ATTOM Data Solutions on home affordability shows that 84 percent of Americans nationwide could not afford a median-priced home in their county during Q3 2018.

“We’ve reached a tipping point for affordability,” said Daren Blomquist, senior vice president for ATTOM. “Something has to give. Prices cannot climb as quickly as they have been over the last few years.”

Analyzing information from the U.S. Bureau of Labor Statistics, ATTOM found that 30 percent of Americans live in region where they needed a household income of at least $100,000 or more to buy a median-priced home. The study was conducted assuming buyers had at least a three percent down payment and taking out a 30-year fixed-rate mortgage.

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 4.15 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: Housing Market, Mortgage rates, household income, home affordability, median price

ARAMCO Report - Wednesday June 3, 2015

Posted by The Aramco Group on Wed, Jun 3, 2015 @ 16:06 PM

Bubble or robust growth in SD housing market?

Housing bubbles have historically occurred when housing prices were above what the population of the same area can afford for a prolonged period of time.

The ARAMCO Group, in an effort to give context to other recent reports of increases in home sales and home prices, currently estimates that more than 1.8 million people cannot afford a median-priced home ($500,000 in May 2015 according to Zillow) in San Diego County.

The ARAMCO Group based its calculations on US Census data, and it assumed 20 percent down payment, 45 percent debt-to-income ratio, and 3.875 percent on a 30-year fixed mortgage, including insurance and taxes. The company also assumed a potential borrower will nominally have $500 per month of other obligations (e.g. monthly credit card debt, etc.).

A potential borrower in this case would need to make $78,000 per year or 23.8 percent more than the San Diego area’s median household income of approximately $63,000. According to US Census data, 56.9 Percent of the local population—or 1.8 million people—makes less than $75,000 per year.

Therefore it is important that economists consider both income growth and home price growth into the future as ongoing disparities would signal a looming price correction.

or 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.

Topics: 30 year fixed rates, Housing Affordability index, Housing, household income, Bubble, Housing Bubble, Housing Affordability

ARAMCO Report - Monday May 4, 2015

Posted by The Aramco Group on Mon, May 4, 2015 @ 14:05 PM

Quarter of Renters use Half of Income on Housing

More than one in four renters use at least half of their monthly household income to cover housing and utility costs according to Enterprise Community Partners, a non-profit that analyzed Census data.  The same study identified that more than 30 percent of renters in California, Florida, New Jersey and New York are devoting the same amount of their household income to these expenses.

Household incomes have not kept pace with increases in rent according the National Association of Realtors. Typical rents have increased by 15 percent in the last five years but incomes have only increased by 11 percent over the same time period.

Meanwhile, mortgage Bonds are near unchanged to begin the week starting on May 4th. This week's calendar is on the light side until Friday’s big Jobs Report.

Renters might consider now to be the time to switch to being homeowners with mortgage rates near all-time lows. Potential homebuyers and homeowners looking to refinance will find conforming no point 30-year fixed mortgages averaging 3.875 percent while 15-year mortgages averaging 3.215 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.

Ask Mehran Aram

Topics: home prices, 30 year fixed rates, rental, Housing, renting, household income

ARAMCO Report - Tuesday September 16, 2014

Posted by Mehran Aram on Tue, Sep 16, 2014 @ 17:09 PM

According to the National Association of Realtors, nationwide the Housing Affordability index fell in July thanks to the continued rise in home values which are outpacing incomes. But price gains are slowing. Median household income rose only slightly in 2013 for the first time since the recession. Conforming no point 30 year fixed mortgage rates average 4 1/4% with 15 year rates closer to 3 3/8ths.

And now for something completely different: Did you know that the world famous Hollywood sign was first erected in 1923? But at the time the sign read “Hollywoodland.”

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.

Ask Mehran Aram

Topics: Reverse Mortgage, 30 year fixed rates, Housing Affordability index, Hollywood Sign, price gains, National Association of Realtors, Hollywood, home values, household income