The increase in average loan sizes for purchase mortgage applications has outpaced the recovery in house prices. 

The Mortgage Bankers Association’s Weekly Application Survey for the week ending March 6, 2015 reported that the average purchase loan size had grown to a record high of $294,900. 

For comparison, the average purchase loan size was about $50,000 lower in the final months of 2007, just prior to the recession, when house prices were at a similar level. 

"The record high average loan size indicates that the strength of the market remains at the high end. We have not yet seen an influx of first-time homebuyers," noted Michael Fratantoni, chief economist for the MBA.

Click to enlarge

(Source: MBA, FHFA)

Consistent with this explanation of high average purchase loan sizes, MBA’s Mortgage Credit Availability Index shows that for the last year the availability of mortgage credit has been increasing more rapidly for jumbo loans (loans greater than $417,000) than for conforming loans.

Most Popular Articles

HomeStreet Bank fined for kickbacks to real estate agents, homebuilders

The FDIC announced Wednesday that it reached a settlement with HomeStreet Bank after an investigation found that HomeStreet had paid kickbacks to real estate agents and homebuilders in exchange for their mortgage business.

Nov 06, 2019 By

Latest Articles

Zillow experiences growing pains as it moves from listing houses to buying them

In the last few years, Zillow has reshaped its entire business, moving from a real estate listings website to a company that supports the entire homebuying and selling experience. And while the company is seeing positive results in terms of growth and revenue generation, Zillow is also experiencing some serious financial growing pains as it expands.

Nov 11, 2019 By