In a report released yesterday by Capital Economics analysts reported that the average loan amount lenders issued to borrowers in the past three months grew by $20,000, suggesting an early sign that buyer confidence is improving across the country. See Average mortgage amount increases by $20,000
Also in the report, a reported 20% drop in visible home inventory over the past 18 months. Locally, readers of this blog are well aware of the market’s shortage of inventory. [Looking back at the numbers for Reno-Sparks, I see that our inventory is down over sixty percent over the past 18 months.]
But what about loan amounts locally? Are borrower’s borrowing more? To get an idea I looked at sales since January 1st – specifically those sales that have been financed. Here’s what I found for the last three months for financed (conventional, FHA and VA) home purchases…
|Month||# of Sales||Average Sales Price||Median Sales Price|
As can be seen in the data above; number of sales, average sold price and median sold price have all increased since January 1st. If we make the assumption that down payment percentages have remained consistent, then it follows that loan amounts have been increasing as well.