More Mortgages Reported in Region, Median Price Decreases

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The number of mortgages in Macomb, Oakland, and Wayne counties increased 5.4 percent in August 2013 when compared to the year before, however, the median mortgage amount decreased.

In a report by Steve Bartley at Advertising That Works in Bloomfield Township, the overall value of mortgages saw a 25 percent year-over-year increase, with August 2013 mortgages bringing in nearly $3.5 billion. Even so, the median mortgage amount — $122,735 — showed an 8.7 percent decrease from last year’s median price.

Steven Conaway, president and founder of Residential Mortgage Consultants in Brighton, says the dip in price doesn’t mean the value of these homes have gone down. “It just means that the higher end homes haven’t been selling as well as some of the lower end homes,” he says. “And that makes sense — it’s going to take some time for people to catch up before they can buy some of the higher priced homes.”

The decrease is also tied to mortgage rates, which increased by 1 percent in the region over the past year. In August 2012 interest rates were averaging 3.5 percent on 30-year fixed-rate mortgage, and nearly 2.9 percent for a 15-year rate. This August, those interest rates increased to 4.5 percent and nearly 3.9 percent, respectively.

“This increase (affects) buyers with the simple fact that people can afford more at a 3.5 percent interest rate than what they can afford at 4.5 (percent),” Conaway says. “They can afford less of a house at a higher interest rate.”

As far as what homebuyers can expect over the next few months, mortgage rates are expected to fluctuate, Conaway says. “The uncertainty in Washington between the government shutdown and the pending debt ceiling resolution may have an effect on the bond market and, in turn, mortgage rates,” he says.

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