# Average Mortgage Application Increases To $411,000.



## WhatInThe (May 20, 2021)

The average mortgage application increased to $411,000. Wonder how much salaries and household income have increased. Not just about the millionaire homes either. 

https://www.cnbc.com/2021/05/19/hom...ver-bigger-mortgages-as-home-prices-soar.html

I get demand but this is geting ridiculus.


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## Aunt Marg (May 20, 2021)

WhatInThe said:


> The average mortgage application increased to $411,000. Wonder how much salaries and household income have increased. Not just about the millionaire homes either.
> 
> https://www.cnbc.com/2021/05/19/hom...ver-bigger-mortgages-as-home-prices-soar.html
> 
> I get demand but this is geting ridiculus.


I see it only getting worse with inflation already having one foot in the door.

Here in Canada house price stats haven't been updated yet this year to reflect the rise, however, $770,000 CAD is the last figure of an average house price where we reside (BC).

Speaking for those who reside in our province, only a select rare few in the younger generation bracket will be able to own a home, and those who have stretched themselves and are currently dug-in for the long haul with ballooning mortgages, will face the wrath of the rise in interest rates in the coming months.


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## Aneeda72 (May 20, 2021)

I really want to sell my house, but apartment rentals have increased as well.  Stuck as usual.


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## Aunt Marg (May 20, 2021)

Okay, so just came across a current article that reflects an updated average price for a home in our province.

The average MLS price across BC has surged to $915,464 CAD


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## Lethe200 (May 21, 2021)

Variable rate/balloon mortgages are pretty much passe with anyone who has financial savvy. Aunt Marg, are these popular where you are?

I don't know a single person who has one, and that includes a lot of Gen X and Millennials who have become homeowners in the last ten years. Fixed rate mortgages are what they ask for, and quite a few have done 15-yr mortgages. 

About the only time I see variable rates is on HELOCs, where they are still reasonably popular. But with low interest rates over the last two years, most people who could - like us - refinanced and closed them.


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## Aunt Bea (May 21, 2021)

Home buying was scary when I was young too!

My advice would be to buy a modest new home in the best school system with the shortest term lowest rate fixed mortgage and minimum downpayment that you can qualify for.

It may be scary now but in 30 or 40 years you will look back and be glad that you took the risk.


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## Don M. (May 21, 2021)

There is an increasing chance for another Housing Bubble, with all these recent prices.  Housing prices have been rising at a rate far outstripping any increases in wages.  People who are buying at these inflated prices may find their "equity" falling to near zero when the markets begin to return to normal....and they may be stuck with a substantial loss if they have to sell.


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## Liberty (May 23, 2021)

Mortgage rates are at historical lows... that's probably why prices are increasing so fast.  Some are borrowing money to pay cash for homes and that knocks out the normal financed folks.  Supply and demand.  Grandson paid $625,000 for a home in Ohio, paid cash.  He's 30 yrs old!


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## Jules (May 23, 2021)

Are fixed rate mortgages in the US for long periods.  I haven’t investigated but I believe the longest term we’re offered in Canada is 5 years.


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## Liberty (May 23, 2021)

Jules said:


> Are fixed rate mortgages in the US for long periods.  I haven’t investigated but I believe the longest term we’re offered in Canada is 5 years.


Fixed rate mortgages are normally offered for 15 and 30 yr term mortgages.  Of course you can pay the mortgage off early if you want to..


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## Packerjohn (May 23, 2021)

Aunt Marg said:


> I see it only getting worse with inflation already having one foot in the door.
> 
> Here in Canada house price stats haven't been updated yet this year to reflect the rise, however, $770,000 CAD is the last figure of an average house price where we reside (BC).
> 
> Speaking for those who reside in our province, only a select rare few in the younger generation bracket will be able to own a home, and those who have stretched themselves and are currently dug-in for the long haul with ballooning mortgages, will face the wrath of the rise in interest rates in the coming months.


I saw the Governor of the Bank of Canada on a video clip yesterday.  He warned everyone that the present rising cost in housing is not sustainable.  His words and I believe him.  I know that everyone seems to want more space as they live at home during this pandemic but the pandemic will end and then these home owners will be stuck with huge Mac Mansions to pay for while the rest of us return to fine dining in restaurants and traveling the world.  If the interest rates go up and I think they have to if the Bank of Canada wants to fight inflation, then these young people will be royally screwed in a not nice way.


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## AnnieA (May 23, 2021)

Here's a bubble about at the bursting point.


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## Aunt Marg (May 23, 2021)

Packerjohn said:


> I saw the Governor of the Bank of Canada on a video clip yesterday.  He warned everyone that the present rising cost in housing is not sustainable.  His words and I believe him.


Definitely makes one wonder, but how many times in the past (leading up to now) have we heard those very words, Packs?

The so called "real estate bubble" was said to burst a few years ago, yet nothing happened, prices maintained a steady plane with steady assessment increases and record sale asking/closing.

Fast-forward to today, real estate is still holding it's own, still climbing, and by all accounts I see no end in sight.


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## Liberty (May 23, 2021)

One of the big drivers in this market is the pandemic.  When families are forced to  cram  in together for a year, they tend to look around and decide what they wanted in a new place...also, a lot of people came out of the pandemic wealthier - saved money on commutes, clothes, travel, gas, etc.  Pent up demand is exploding now.  Of course some may decide to stay put and add on, but most probably want a bigger domicile with room for an office and larger spaces to have some privacy.


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## Jules (May 23, 2021)

There’s also panic buying.  
“If I don’t get in now, I never will.”  
“The type of house I want won’t be affordable if I don’t buy it now.”  
“They’re not making any more lakes.”


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