Size, Price of New Homes Keep Going Up, So Does Credit Score Required

Size, Price of New Homes Keep Going Up, So Does Credit Score RequiredWhile the housing market continues a mostly stable recovery, there is one trend which has been somewhat overlooked, at least until now.
The nation’s home builders says that the average home size has continued to rise for the past four years, from 2,362 square feet in 2009 to 2,679 square feet in 2013. This applies to newly-constructed homes.
The U.S. Commerce Department reported Wednesday that sales of new single-family homes jumped to a 5-1/2-year high in January. The 9.6 percent monthly jump soundly beat expectations.
Nonetheless, the trend of buying bigger may be even more revealing as to the strength of the housing recovery.
The data on the trend toward larger homes was recently presented by the National Association of Home Builders (NAHB) during the International Builders’ Show in Las Vegas.
The share of new homes with at least four bedrooms has also been rising, from 34 percent in 2009 to 48 percent last year.
Meanwhile, the percent of homes with at least three full bathrooms has jumped from 23 percent in 2010 to 35 percent in 2013. The share of homes with three-plus garages has climbed from 16 percent in 2010 to 22 percent last year. And the percentage of two-story single-family homes started, rose from 51 percent in 2009 to 60 percent in 2013.
Of course, as homes get bigger, so does the average sales price. That’s jumped from $248,000 in 2009 to $318,000 in 2013.
Higher Credit Scores Needed
Despite the surge in bigger new homes, it’s tougher to qualify for these mortgages.
“It requires a high credit score and a nice income to qualify for a mortgage,” said Rose Quint, NAHB assistant vice president for survey research.
Quint said that the spread between the average Experian credit score of all U.S. consumers and the average home borrower’s score has risen from 33 points in the early 2000s to 58 points in 2013.
The median income of new-home buyers has steadily climbed from $91,768 in 2005 to $107,607 in 2011.
During the same period, the number of new-home sales has dramatically declined, from 1.28 million to 306,000.
“There are not as many people who have the income that can qualify for a new home,” said Quint.

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