Tag: HPI

Conforming Loan Limits Set To Increase For 2018

Last year, the conforming loan limit was set to increased to $424,100 for this year (2017). Now, most of the United States will see an increase for single unit properties to $453,100 for 2018.

The HERA (Housing and Economic Recovery Act) indicates that the baseline conforming loan limit should be adjusted with the change in the average home price in the United States every year.

According to the FHFA (Federal Housing Finance Agency):

According to FHFA’s seasonally adjusted, expanded-data HPI, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017. Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.

A loan is considered “conforming” when it conforms to Government-Sponsored Enterprise (Fannie Mae and Freddie Mac) guidelines.

In light of the recent announcement of the S&P CoreLogic Case-Shiller Home Price NSA Index increase from last year, and FHFA’s seasonally adjusted, expanded-data HPI increase, this conforming loan limit adjustment is a welcome change for home buyers in high valuation markets.

To learn more about this increase, you can read the press release from the FHFA by going to https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2018.aspx.

National Home Price Index Up 6.2% In Last 12 Months

by Steve Remington

Source: September S&P CoreLogic Case-Shiller National Home Price NSA Index Up 6.2% In Last 12 Months

Recent Analysis of the September HPI figure show as a 6.2% annual gain in home prices, up 5.9% from the previous month. Several large markets that were hit hardest in the financial crisis are reporting the highest gains, including San Diego (up 8.2%). 15 of the 20 major cities posted increases before seasonal adjustments, but all 20 reported increases after seasonal adjustments.

On the bright side, these price increases continue to be fueled by a strong economy, low mortgage interest rates, and a low inventory of homes; however, continued price increases and low inventories can put pressure on affordability for some people.

Steve Remington
Chief Operations Officer at Benchmark

Top 5 Financial Reasons To Buy Now

by I Am Benchmark

Increasing Prices

Over the last year, home prices have increased by 7.1%, according to CoreLogic’s latest Home Price Index (HPI) report. Over the next year, the HPI also predicts that prices will continue to rise at a rate of 4.9%. Clearly, we are long past the dip in home pricing. Home values are expected to continue to appreciate for years to come. In short, waiting no longer makes sense.

Anticipated Rising Mortgage Interest Rates

The Primary Mortgage Market Survey published by Freddie Mac shows that interest rates for a 30-year mortgage have drifted around 4%. Experts predict that rates will rise over the next year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors project that rates will increase by this time next year. An increase in rates is likely to cause your potential monthly mortgage payment to rise if you plan buy your next home.

Either Pay Yourself or Pay Your Landlord

Some renters who are uncomfortable with the obligation of a mortgage have not yet purchased a home. The reality is that unless you are living rent-free, every rent payment you make is paying your landlord’s mortgage. As a homeowner, your mortgage payment can be considered ‘forced savings’ in that it builds equity in your home that you can use to your advantage later in life. As long as you continue to rent, you will continue to build equity… for your landlord. When you buy a home, the advantage in housing payments is yours. For more on this, read Millionaire Tells Millennials To Buy A Home, published in January.

Rent Control

A fixed rate mortgage payment will not increase over the life of the loan. Rent, on the other hand, will likely continue its historic path. See the graph above from the U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: Rent of primary residence, retrieved from FRED, Federal Reserve Bank of St. Louis: https://fred.stlouisfed.org/series/CUUR0000SEHA.

In short, buying a home can help you take control of your housing costs.

It Might Be The Right Time To Act

The cost of a home is determined by (1)the price of the home, and (2)the current mortgage rate. It appears that both are on the rise. But what if they stagnated? Would you wait? Consider the real reason you are buying and decide if you think it is worth waiting.

Whether you want to have a great place for your children to grow up, the choice to keep pets and room for them to roam, you want your family to be safer, or you just want to have control over renovations, now may be the time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could result in significant savings.

If you decide that you are ready to act, find your loan officer and applyapply now.