Owners have the largest mortgages in history!

It’s no secret that the housing market has been unbalanced over the past few years. Prices have been rising, and with them, so have average home loans.

mw-average mortgage size

According to The Mortgage Bankers Association (MBA), the average home loan size is the largest its been in the history of its survey, which began in 1990.

Additionally, the median mortgage size was only about 3.3 times the median annual income in 1990 – now, it’s more than 5 times as big. This is likely due to the increase in housing prices, buyers getting bigger homes and lower interest rates over the years.

Here’s a look at some housing market characteristics for select years.

Housing market data points
Courtesy Realtor.com (link in text above)

According to Mike Ervin of Supreme Lending, people are just waiting and waiting for mortgage rates to go down. People who are using securitizers like Fannie Mae and Freddie Mac have to wait until the Fed buys up more mortgage bonds so that rates will go down. It is unknown if that will happen, but rates have dropped in 2017.

Multiple factors can affect the bond and mortgage markets. The most recent major event was the Trump election and presidency, which saw a large immediate increase in mortgage rates, which have since rebounded, even with the Fed raising rates.

In California, we are in the wealth-building business and real estate in the Bay Area is going to be a good investment for years to come. I am here to advise, provide insight and help you build wealth through real estate.

Pending home sales are down in CA – what does it mean?

According to the California Association of Realtors, pending home sales have dialed back and marked the weakest February in three years.

Courtesy mcar.com.

Low housing inventory, eroding affordability and rising interest rates made pending sales on a year-over-year basis for the month of February suffer after a good start to the year in closed escrow sales. Also, sellers simply aren’t selling.

They did see elevated market activity, but the Bay Area pending sales specifically were down year-to-year for the fifth straight month. According to the release, the Bay Area has been plagued by a shortage of homes on the market and poor affordability.

We have seen an increase in listings starting in April, but with pent-up demand, buyers are getting frustrated losing out in multiple-offer scenarios and with ever-increasing prices.

If you want to know more about the market, give me a call!