http://www.fhaloanpros.com/2008/10/the-illusion-of-higher-loan-limits/ The Unofficial Guide to FHA Loans & Mortgages Tue, 17 May 2011 20:16:59 +0000 hourly 1 http://wordpress.org/?v=3.0.1 http://www.fhaloanpros.com/2008/10/the-illusion-of-higher-loan-limits/#comment-28825 jdj Fri, 31 Oct 2008 22:42:17 +0000 http://www.fhaloanpros.com/?p=621#comment-28825 In Los Angeles, where prices still are far to inflated relative to historical rents and incomes, hoping for something to make home prices to rise is not helpful. In Los Angeles, where prices still are far to inflated relative to historical rents and incomes, hoping for something to make home prices to rise is not helpful.

]]> http://www.fhaloanpros.com/2008/10/the-illusion-of-higher-loan-limits/#comment-28764 David Lorti Thu, 30 Oct 2008 20:02:07 +0000 http://www.fhaloanpros.com/?p=621#comment-28764 Our FHA limits are lower for Arizona and will be marked down as well at the beginning of the year. Given the dominance of FHA loans right now, any changes such as this one can affect the activity in the market. You have a very valid point that prices will have declined in line with the changes to the FHA loan limits. There is validity to this and it's a great perspective! However, in the Phoenix area where most of the activity takes place at the $400,000 or less threshold, this could put more pressure on sellers to lower their prices to slip under the threshold and make their home available to FHA borrowers (these are likely over 50% of the loans right now in Phoenix). Our FHA limits are lower for Arizona and will be marked down as well at the beginning of the year.
Given the dominance of FHA loans right now, any changes such as this one can affect the activity in the market. You have a very valid point that prices will have declined in line with the changes to the FHA loan limits. There is validity to this and it’s a great perspective! However, in the Phoenix area where most of the activity takes place at the $400,000 or less threshold, this could put more pressure on sellers to lower their prices to slip under the threshold and make their home available to FHA borrowers (these are likely over 50% of the loans right now in Phoenix).

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