As a REALTOR®, I spend a lot of time and energy looking at market news, trends and regulatory issues in order to spot potential concerns my clients will have to prepare for. A big hairy one is coming up.
Since February of 2008, the FHA and GSE loan limits were passed as part of the Emergency Stimulus Act. On October 1, 2011, loan limits for FHA and GSE loans will decrease, lessening the availability of mortgage credit for many responsible American families, who would otherwise be a good loan risk. The current loan limits are set to expire on September 30, 2011. Unless Congress acts, FHA and GSE loan limits will drop to 115% of local area median home price. I urge you to act now and contact your congressman to extend the current mortgage loan limits.
We need time for the market and public perception of it, to self-correct, and stabilize. Reducing mortgage liquidity, now, when the market is still decreasing in quantity and dollar volume, year over year, will hurt our fragile economic recovery. This affects you and me directly, even if you’re not currently buying or selling. The intrinsic worth of most homes has decreased dramatically since 2008. That’s the worth of your home, the biggest investment in most people’s lives.
The effects carry beyond you and me though. In today’s real estate market, lowering the loan limits will make mortgages more expensive for prospective buyers nationwide. Neither Private individuals nor investors have yet reentered the housing markets. Lowering the loan limits now leaves otherwise solid borrowers without hope of affordable financing. That only keeps this housing crisis hovering over each one of us longer. The resulting lack of demand in the housing markets affects mega-retailers like Walmart, Home Depot and Lowes, as new households are set up. Imagine the impact on the local retailers, who rely on a smaller segment of the population. The effect on government from lower tax revenues is a consideration too as Town Workers, Teachers, Firemen and Police Officers are laid off and state aid is lessened.
Many think lower rates will only affect a few high-cost markets. The new limits, published by HUD and the Federal Housing Finance Agency (FHFA), show that more than 669 counties in 42 states and the territories would be negatively impacted by the loan limit change. The average decline in loan limits would be more than $68,000. Only eight states will see no decline. Every other state will see a drop in loan limits, and therefore a corresponding drop in the availability and affordability of mortgage credit.
It’s imperative that we all contact our congressman and convince them of the urgency of passing legislation to extend the current limits and preserve housing opportunities for American families.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise! Contact me today for a market analysis of your house!
Lew McConkey
I service the following towns in South Shore MA: Whitman, Hanson, Brockton, Rockland, Abington, Pembroke, East Bridgewater, West Bridgewater, Easton, Weymouth, Braintree and Quincy MA. Rosen Realty
(781)252-9789
http://www.facebook.com/South.Shore.Homes
Lew McConkey can get you the latest properties that are on the market
