If you want proof that more and more middle and lower income Americans are being left behind by the housing recovery, look no farther than the latest Mortgage Bankers Association report on purchase loans.
Loan sizes for purchase mortgage applications are now increasing faster than house prices.
The MBA’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.
At an average of nearly $300,000, the average mortgage has far outpaced the median existing home price of $199,600 in January
“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.
At those prices, perhaps we never will.