New loan limits and local home prices Posted by Elizabeth Rhodes
Three of the biggest providers of home-mortgage money, Fannie Mae, Freddie Mac and FHA, announced significant increases in their loan limits, effective Thursday. Details are available in a story in Friday's paper.
How the higher loan limits may improve local homebuyers' purchasing power was spelled out in numbers just provided by Cheri Brennan, spokesperson for the Northwest Multiple Listing Service.
Her numbers follow.....
Brennan compared the number of single-family homes for sale, and their prices to the new and old loan limits.
She found that in King County, just 22 percent of the homes were priced under FHA's old loan limit of $362,790, and 32 percent were under Fannie-Freddie's old $417,000 limit. Now 56 percent of the county's single-family homes would qualify for the new loan limit -- $567,500 -- adopted by the Fannie, Freddie and FHA.
King County's median sales price over the last six month was $439,950 for houses. The median asking price was $524,950.
In Pierce County, better than 60 percent of homes were priced under the old loan limits. That's increased to 83 percent when the limits were increased. The median sales price was $273,000 for houses sold in the past half year. Median asking price was $324,950.
In Snohomish County, 78 percent of the homes are now priced at or below the new limits, versus 36 percent for FHA and 53 percent for Fannie-Freddie before Thursday's increase. That county's median six-month sales price was $359,950, while the median asking price was $400,725.
As Brennan points out, factoring in different interest rates and down payments would alter the result somewhat. But in general her numbers show the increased limits have the potential to help buyers, as well as current owners seeking to refinance.