New FHA Loan Limits - Revival or Disappointment on the Horizon
The rise in the FHA insured loan limits from $200,200 to $271,000 (low-cost markets) and the rise in limits to $417,000 (high cost markets) coupled with the raise in the cap to $729,750 on jumbo mortgages that Fannie Mae and Freddie Mac can buy. This is expected to raise the new home demand by 10% according to research firm Zelman & Associates.
This move by Congress can help pay dividends in terms of helping to slow down the falling prices in home sales but I doubt that this will help bring about revival in the entire market. I believe that the Fed’s continued push to dropping interest rates and a increase in FHA backed loans will help fund more deals as those homebuyers who have been sitting flat may now consider making a move into the market.
Your friend,
