Increase Reflects Rising Home Prices
The Federal Housing Finance Agency (FHFA) announced that the 2019 general and high-cost area maximum loan limits will increase for the third straight year in a row. Key details of the increase include:
- The new base loan limit in most of the country will be $484,350.
- This represents a 6.9% increase over the 2018 limit.
- The ceiling limit for most high-cost areas will be $726,525.
What does this mean for buyers?
Loan limits are important to buyers because rising home prices require a higher mortgage. In fact, the FHFA bases their loan limits on the House Price Index report. In the latest report, the average home value increased by 6.9% – matching the 6.9% increase over the 2018 limit. It’s a good sign to hear this, alongside other positive indicators of the US economy including a +3.2 increase in annual growth, the best expansion in 13 years (source: Commerce Department).
You should be aware, however, that while 3,000 counties will benefit from the increase, the percentage of increase will vary, depending on location. Click here to see the full list by county.