Average Loan Amount Grows: Market Thaw?

The average amount of mortgages being approved by lenders has grown in the last three months from $215,000 to $235,000 — a possible sign of increased buyer and lender confidence, according to analysts at Capital Economics.

Besides the increase in average mortgage amounts, analysts also point to other positive signs shaping up in the housing market, including a 20 percent drop in the home inventory the last 18 months.

“It may be an early sign that buyer confidence is improving,” write Capital Economics analysts Paul Dales, Paul Diggle, and Amna Asaf in a new report.

The report notes that the months’ supply of for-sale homes has dropped to a level where sales can support current prices, according to Capital Economics. Still, the report warns about 3.9 million homes that are in shadow inventory.

Source: “Average Mortgage Amount Increases by $20,000,” HousingWire (April 11, 2012)