Size Of Average Home Loan Falls

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According to the Mortgage Bankers Association, the size of the average home loan has fallen and is now at its lowest level since February. The drop is good news for the real estate market because it indicates that there are more first-time home buyers buying homes this year. “Given the overall increase in purchase volume, we view this as a positive development, as it signifies more first-time home buyers are getting into the market,” Mike Fratantoni, MBA’s chief economist, told CNBC. “We are not back to levels typical of a healthy market, but for the first time in a while it is steadily improving.” The news comes during a week when mortgage application volume was virtually unchanged from the week before, according to the MBA’s Weekly Applications Survey. The Refinance Index slipped 1 percent from one week earlier, while demand for loans to buy homes bumped up 1 percent. Purchase application demand – which is considered a good indicator of future home sales – is now 18 percent higher than it was the same week last year. Average mortgage rates were also relatively flat, with rates unmoved on 30-year fixed-rate mortgages with conforming loan balances as well as 15-year fixed-rate loans. Mortgage rates declined on loans with jumbo balances and those backed by the Federal Housing Administration. The MBA’s weekly application survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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