According to the Mortgage Bankers Association, mortgage applications rose to the highest level of the year last week. Overall, applications increased 15.5 percent, reaching the highest point they have been since May 2010.
“An improving job market is beginning to pave the way for an improving housing market,” said Michael Fratantoni, MBA’s vice president of research and economics. “Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications.”
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Currently, a prospective buyer who takes out a 30-year mortgage loan can expect to pay approximately $50 more per month (based on purchasing a $170,000 home with a 20 percent down payment) compared to October, when rates stood at 4.2 percent.
Despite the jump in rates, relatively low home prices indicate that affordability will continue to remain high for some time.
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January’s “This Month in Real Estate” video has been released. This edition focuses on a recent NAR report revealing buyer affordability being at an all-time high. According to the report, home payments are taking just 13.6 percent of the median family income. This number is down from 20 percent in 2007. Access the video by clicking the “Play” button below.
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