For the third year in a row, the Federal Housing Finance Agency has raised the conforming loan limit for Fannie Mae and Freddie Mac in nearly every part of the U.S. The three-year increase follows a ten-year period where the FHFA kept the conforming loan limit the same. The decision to continuously raise loan limits over the past three years is a direct result of rising home values. The FHFA’s third quarter 2018 House Price Index report, which estimates the increase in the average U.S. value for the last four quarters, showed that home prices increased 6.9% on average, between the third quarters of 2017 and 2018. As a result, the maximum conforming loan limit will increase in 2019 by the same percentage, going up from $453,100 to $484,350.
In addition, loan limits will also increase in “high cost areas”. These are areas where 115% of the local median home value exceeds the baseline loan limit. The new ceiling loan limit in these areas is calculated as 150% of the conforming loan limit, which comes to $726,375. The previous high cost ceiling was $679,650.
***The Federal Housing Administration (FHA) will set its own loan limits for 2019, but those numbers are still pending.
Did You Know? According to a survey by the Census Bureau, an American will move 11.4 times, on average, during his or her lifetime.
Sources:
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By: Jon Iacono