FHA to Increase Loan Limits in 2018

FHA to Increase Loan Limits in 2018
FHA   article by Daily Real Estate News | December 11, 2017

handsFollowing on the heels of the Federal Housing Finance Agency, the Federal Housing Administration announced that it will increase its loan limits in most areas of the country in 2018. The FHFA had announced new limits for loans eligible for purchase or guarantee by Fannie Mae and Freddie Mac on Nov. 28.

In high-cost areas of the country, the FHA’s ceiling on loan limits will rise from $636,150 to $679,650, according to the Department of Housing and Urban Development. In addition, the national mortgage limit for FHA-insured reverse mortgages—known as home equity conversion mortgages—will rise from $636,150 to $679,650.

The FHFA calculates new limits each year based on median home prices.

The FHA loan limits will rise in 3,011 counties but will remain unchanged in 223. Fannie Mae and Freddie Mac’s new conforming loan limits for 2018 will be $453,100 for conforming loans and $679,650 for jumbo loans in some high-cost areas. The new limits for the FHA and the FHFA will take effect on Jan. 1.

Source: U.S. Department of Housing and Urban Development; REALTOR® Magazine Online, Daily Real Estate News 121117


Kenneth Bargers, REALTOR® License 318311 ♦ Pilkerton Realtors License 257352
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New Low for First-Time Home Buyers

New Low for First-Time Home Buyers
Article by Daily Real Estate News; January 27, 2014

First-time home buyers accounted for 27 percent of sales nationally in December, the lowest since the National Association of REALTORS® began tracking them in 2008. Typically, first-time home buyers account for 40 percent of the market.

Why are their numbers dwindling? Housing experts point to several hurdles, such as high student loan debt, less-than-perfect credit, low employment and wage growth, and the double-digit growth in home prices this past year.

First-time home buyers tend to purchase lower-priced homes, but they’re facing competition for those homes from all-cash investors. Cash purchases accounted for 42.1 percent of all U.S. home sales in December, up from 38.1 percent in November, and up from 18 percent a year prior, according to RealtyTrac.

Tight credit is also preventing younger home buyers from qualifying for a mortgage to buy a home, as mortgage lenders require higher down payments. FHA loans, which many first-time home buyers turn to for the low downpayment requirements, have seen their market share decrease recently after an increase in premiums and fees this year made them less attractive to some.

However, Fannie Mae and Freddie Mac are lending more to first-time buyers, according to a report from Inside Mortgage Finance. The share of financing for first-time home buyers by the mortgage giants reached 19.5 percent in December, up from 14.1 percent a year prior.

Source: “All-Cash Offers Crushing First-Time Homebuyers,” CNBC (Jan. 23, 2014); Daily Real Estate News (012714) | Blog, In The News, distribution provided by Kenneth Bargers and Bargers Solutions, member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

FHA Loan Apps Rise as Borrowers Try to Beat Fee Hikes

FHA Loan Apps Rise as Borrowers Try to Beat Fee Hikes

Mortgage applications for Federal Housing Administration loans soared 11 percent from the previous week as borrowers try to rush their applications in to beat the higher FHA costs that will start rolling out on Monday, according to the U.S. Mortgage Market Index report released from Mortech Inc. and Mortgage Daily.

Starting April 1, the FHA will be increasing its annual mortgage insurance premiums on all FHA loans. The annual premium is paid with the monthly mortgage payment. The FHA also will be increasing the FHA mortgage insurance premium that is paid up front during closing, also starting April 1.

Borrowers who are trying to avoid the higher fees are trying to get their FHA mortgage applications approved before the changes take effect. The new fees also will apply to home owners who refinance their mortgages.

FHA loans have soared in popularity in recent years since they allow for smaller down payments, as low as 3.5 percent compared to traditional loans, and often carry less stringent credit requirements.

Source: “Mortgage Applications for FHA Loans Increase Ahead of Higher Fees,” Realty Times (March 28, 2012); Daily Real Estate News (March 29, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors

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Market Comment for Week of September 27, 2010…

MARKET COMMENT   Mortgage bond prices ended near unchanged last week keeping mortgage interest rates historically low. The Fed meeting Tuesday went as expected. The Fed kept interest rates unchanged and noted they will keep rates low for an extended period of time. Mortgage rates were positive through the middle portion of the week. Unfortunately stronger than expected data and surging stock prices the latter portion of the week eroded the earlier positive movements. Despite those negative movements rates finished near unchanged overall for the week. 

The Treasury auctions will be important this week. If foreign demand for US debt remains strong mortgage interest rates may remain lower. Consumer confidence will set the tone for trading the beginning of the week. 

LOOKING AHEAD 

  • 2-year Treasury Note Auction; Sept. 27; Important. $36 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
  • Consumer Confidence; Sept. 28; Consensus Estimate 53.9; Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
  • 5-year Treasury Note Auction; Sept. 28; Important. $35 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
  • 7-year Treasury Note Auction; Sept. 29; Important. $29 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
  • Q2 GDP 3rd revision; Sept 30; Consensus Estimate Up 1.7%; Important. The aggregate measure of US economic production. Weakness may lead to lower rates.
  • Personal Income and Outlays; Oct. 1; Consensus Estimate Up 0.2%, Up 0.3%; Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
  • PCE Core Inflation; Oct. 1; Consensus Estimate Up 0.1%; Important. A measure of price increases for all domestic personal consumption. Weakness may lead to lower rates.
  • U of Michigan Consumer Sentiment; Oct. 1; Consensus Estimate 67; Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
  • ISM Index; Oct. 1; Consensus Estimate 55.0; Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.

MARKET CONDITIONS   There is a Chinese proverb that states, “May you live in interesting times.” It is often argued that the word interesting is meant to be a synonym for turbulent or dangerous. This phrase hits the bull’s-eye given the current state of the financial markets. While stocks and bonds are swinging around wildly there is some good news. Interest rates for conforming and FHA/VA loans are historically low. 

Remember, low rates are not a given considering the uncertainty in the financial markets. Inflation, real or perceived, erodes the value of bonds causing bond prices to fall and rates to rise. The last thing the economy needs now is higher mortgage interest rates. If inflation emerges that very well may happen despite the continued Fed efforts to keep rates low. With so much uncertainty, a cautious approach to float lock decisions, especially heading into the inflation data this week, would be wise. 

Source: Courtesy of Todd Kabel, US Bank, Nashville, Tennessee