Mortgage shoppers more financially responsible than in the past

Mortgage shoppers show improved credit scores

Posted on 1/30/13 1:16:00 PM

The number of Americans who are looking to purchase a home is expected to increase in the next year, as home prices are starting to increase and unemployment rates decrease.

MortgageMarvel.com, an award-winning mortgage shopping service that gives consumers quotes from hundreds of lenders, recently revealed specifics about more than 450,000 online mortgage applications that were received in 2012. The company revealed that the average credit score for online mortgage shoppers was 70 points above the average FICO score that was reported in 2012.

"It's worth noting that even the lowest average credit score of 689 is still considered to be a good credit score," said Rick Allen, chief operating officer of Mortgage Marvel. "If you're shopping for a first home, a score in this range is certainly considered to be good, and it will get you a reasonably priced mortgage."

The online mortgage applications also showed that the national average credit score for mortgage applicants was up by four points in comparison to 2011, resulting in an average of 734. The company also found that California mortgage applicants had the highest average credit scores in the nation, with a reported average of 755, 21 points above the national average.

Following California on the list were Hawaii, which jumped from the No. 4 spot in 2011 to the No. 2 spot this year; Oregon; Connecticut; and Washington, with all of the states reporting average credit scores above 746 during 2012.

Mississippi was the state with the lowest average credit score among online mortgage shoppers in 2012, showing an average credit score of 689. Following Mississippi were Arkansas, Louisiana, West Virginia and Oklahoma, all posting average credit scores below 705.

Home sales improve in 2012
The number of home sales also increased in 2012, according to figures recently released by the National Association of Realtors. The organization reported December sales of previously-owned homes came in at 12.8 percent more than a year ago, bringing the total number of sales to 4.56 million.

The NAR expects the improvements in the housing market to continue over the next year, as Americans are being put back to work and are able to contribute more money to their basic savings accounts.

Realtors predicted home sales to come in at 5.1 million in 2013 and 5.4 million in 2014, gradually making improvements every year toward a full recovery from the housing crisis, which left many Americans in foreclosure and underwater on their mortgages.

Trulia Housing Barometer shows improvements
Trulia recently released the results of its housing barometer, showing that the housing market is twice as healthy as it was a year ago.

Construction starts, existing home sales and the delinquency-plus-foreclosure rate were key indicators considered when factoring the results of the barometer. With the three factors considered, Trulia reported that the housing market is now 52 percent of the way back normal, which is almost twice the 27 percent that was reported in December 2011.

Construction starts were at a 54-month high during December and starts were reported to be at a 954,000 annualized rate, which is a 12 percent increase month-over-month and a 37 percent increase year-over-year.

While construction starts increased, the delinquency-plus-foreclosure rate was steady at 10.61 percent in December, down from 10.63 percent in November.