Average home mortgage size hits record $ 402,000
Although home loan applications fell last week as mortgage rates rose, the average loan to buy a home has hit an all-time high.
A home purchase requisition tracking index fell 5%, seasonally adjusted, last week from the previous week, according to the Mortgage Bankers Association. The metric remained unchanged on a week before.
But as house prices continue to rise ascend as long as the offer remains low and strong demand persists, buyers are seeking loans for record amounts. The average purchase loan size reached $ 402,200 last week, up from $ 398,600 the week before. This is the highest in the 30-year history of the MBA survey.
Joel Kan, head of industry forecasting at MBA, said that the increase in loan size, along with a higher volume of purchase requests year over year, indicates that demand remains strong, even if it decreases a bit.
“Requests to buy cooled in the first week of February, but homebuyers are still very active,” he said in a statement. “Purchasing activity was 17% higher than last year.”
MBA Index Tracking refinancing requests also fell 4% week-over-week. Kan noted that, as with purchase loans, the volume was up 46% from the same week in 2020.
Kan attributed the weekly declines in both indices in large part to rising mortgage rates as expectations for economic growth accelerate.
“Cash rates have been pushed up by expectations of faster economic growth as the rollout of the COVID-19 vaccine continues,” he said. This is the fourth time in six weeks that rates have increased.
The rate on a 30-year fixed-rate mortgage was 2.96%, down from 2.92% the week before. This is the highest rate since November, according to Kan. Jumbo rates fell 1 basis point week over week to 3.11%.