Crazy Mortgage Stats from MBA

04/17/2017
 
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The MBA shared and interesting stat last week on the current median mortgage loan amount.  Crazy stuff man.  Check it out.

Comments

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Comments
  • I am 28 and I want a smaller house. I like other things too much to worry about maintaining a big a** house. I simply have not sold and bought bc of this reason. Thank you for your concern

    falan greenway April 17, 2017 4:26 am Reply
  • I disagree in regard to us now having the most ‘unaffordable’ housing. That is contrary to info that Barry Habib shared at a recent MBA conference. In addition, there is no direct relationship between home prices and income; if a home price increases 5%, you only need a 1% increase in income to cover it. Again, ask Barry Habib to explain.

    Oh, and one more thing. You continue to mispronounce Richard Cordray’s last name. It CorDRAY, not CorDROY and you guys keep saying.

    SarcasmDetector April 17, 2017 5:13 am Reply
  • Good point Sarcasm. And on the flip side of that math, it only takes 1% drop in average income for housing prices to drop 5% and it only takes 1% interest rate increase for housing prices to fall 10%.

    Check out this graph from the national bankruptcy institute regarding how upside down Americans are in housing.

    http://www.abi.org/newsroom/chart-of-the-day/national-home-equity-distribution-by-ltv-segment-q3-v-q4-2016

    Considering the latest study by Corelogic, 8% of American mortgage holders are STILL “underwater”. If interest rates go up just 1% and cause values to fall 10%, then 14% of mortgages will be upside down, and if rates just go up just 2% (causing 20% home-price devaluation), then approximately 1 in 4 mortgage holders will owe more than their house is worth.

    We saw this happen in 2008 which was was followed by a tsunami of Foreclosures.

    The solution to the problem that the lending industry has created for itself is not “tiny homes”. There isn’t enough cheap developable land immediately available (outside BFE Texas) and Developers and builders aren’t going to give up 30% profit margins (to build McMansions) and start switching to first-time, Affordable homes that yield only 5% margins.

    No, that will never happen.
    The solution, just like it was in 2008, is a massive housing correction and an inevitable crash in housing prices.

    Finally you are starting to do the math and are probably are just now coming to the same conclusion.
    2nd real estate bubble crash.
    It has to happen, it’s going to happen.

    Double Real Estate Bubble April 17, 2017 8:38 am Reply
  • In Southern California, it’s about the land. Condos are more affordable, and many high rise condos are available, but the builders Jack up prices to the level of SFR’s, and nobody wants affordable housing in nice areas. Can builders build/sell more condos with lower price tags? Yes, but they won’t!

    Jack April 17, 2017 9:51 am Reply
  • There is not enough profit in small homes. They can cost 30,000 to 50,000 around here. The lenders don’t want mortgages that small. In addition, the cost of new construction doesn’t really allow for a home to be built under 180,000 for a builder to make a profit. Small smart houses are dumb. Put the deal on a credit card if you want one that bad.

    Mark April 17, 2017 4:39 pm Reply
  • Homes are still much more affordable than they were back in 2006 and 2007, even though interest rates have increased and the median price of homes is much higher. http://economistsoutlook.blogs.realtor.org/2017/02/10/december-2016-housing-affordability-index/

    Paul Krause April 18, 2017 7:58 am Reply

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