The average size of a mortgage that buyers are taking out has hit a record high.
In D.C., the average mortgage loan is now about $495,000. When compared to states, D.C. ranks second only to California for the average mortgage loan size.
Part of the rise in mortgage loan size is that prices continue to increase, but record high loans are also a sign of a change in who is buying.
“The past couple of weeks seeing an increase in the average loan size suggests that some move-up buyers are entering the market and even some activity at the higher end pushing up that loan size,” Mike Fratantoni, chief economist at the Mortgage Bankers Association in D.C. told WTOP.
More move-up buyers selling would be very good news for first-time buyers.
“Inventory has been so tight that people have been reluctant to list their property because they couldn’t find one to buy,” Fratantoni said.
“Now if we are seeing some additional inventory in the market, I think it frees up both that move-up buyer and opens up properties for entry-level first-time homebuyers.”
Buyers are still coming into the market.
The Mortgage Bankers Association says overall conventional purchase loans are up 2.1 percent from a year ago, a sign buyers may be encouraged by the modest increase in housing supply.