Home prices have been increasing steadily for years, but those increases have been balanced by record-low interest rates.As rates have recently begun to increase alongside prices, this rise has created affordability issues for potential homebuyers.According to the First American Real House Price Index (RHPI), consumer homebuying power decreased 5.1 percent between November and December of this past year, and declined 2.1 percent year over year. This was coupled with real house prices increasing 6.2 percent in the same time frame.To meet these higher prices, homebuyers are borrowing more to purchase the home they desire. In the week ending March 3, the average loan size for a purchase mortgage application as recorded by the Mortgage Bankers Association (MBA) was $313,300, the highest average recorded since the MBA started tracking the data in 1990.This rise in affordability has become a critical watchword in the real estate industry — for real estate agents and mortgag…
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