- Office of Consumer Affairs and Business Regulation
Just last month, the U.S. Census Bureau in conjunction with the Department of Housing and Urban Development (HUD) released a variety of homeownership and construction statistics. This information is drawn from the annual Survey of Construction, partially funded by HUD. Collecting data on housing provides crucial insight into the financial health of the American economy as a whole. The housing industry takes up over 25% of the nation’s total investments and approximately 5% of the overall economy.
Mortgages remain the most popular method of attaining homeownership throughout the country. Of the 771,000 single-family homes sold in 2021, 571,000 were purchased using conventional financing while only 48,000 were purchased using cash. In 2021, the median sales price of a new single-family home was $397,100, while the average sales price was $464,200. Borrowing money to purchase a home is a complex process.
The Division of Banks (DOB), an agency within the Office of Consumer Affairs and Business Regulation (OCABR), is the primary financial services regulator in Massachusetts and oversees mortgage lenders, mortgage loan originators, and mortgage brokers in the state. In collaboration with DOB, OCABR compiled the following tips for beginning your journey of homeownership:
- Choose between the two basic types of interest rates: a fixed-rate mortgage or an Adjustable-Rate Mortgage (ARM). Fixed-rate mortgage interest rates do not change throughout the life of the loan. While ARMs have variable rates, meaning the rate changes periodically during the life of the loan.
- Get prequalified and determine how much you can spend on a home by contacting a bank, credit union, mortgage lender, or mortgage broker. The amount you are approved to borrow is based on your income, debt obligations, down payment, and credit history.
- Know the difference between a broker and a bank, or lender. A broker originates a loan— while loans are only able to be funded by a bank or a lender. A bank/lender can both originate a consumer loan application and fund the loan.
- Consider consulting an attorney before signing any legal documents or contracts. They are able to review the documents and assist with meeting important deadlines.
The Division of Banks offers an online resource outlining the home buying process in the Commonwealth as well as information on lending and other details to help you make informed financial decisions.
For more information about American Housing Month or the annual Survey of Construction, contact the U.S. Census Bureau or HUD. The U.S. Census Bureau can be reached at 301-763-INFO (4636), or toll-free at 800-923-8282. The Department of Housing and Urban Development can be reached at 202-708-1112.
