Conforming Home Loan Limit Increasing to $715,000

There's good news for homebuyers! I understand that affordability is being put to the test. We just saw a 44% increase in prices and a 3% increase in interest rates. We also just saw the new conforming loan limit increase to $715,000! This is HUGE! The current conforming loan limit is $647,200, meaning those homebuyers that might not qualify for a jumbo loan or need a quicker close now have the means to make it happen! Much more of the market now falls within this conforming loan limit.

Along with the good news, there is some bad news. Inventory is decreasing. But let's not panic. This is seasonal. It typically starts to turn the corner in October, but we saw that much earlier with the rise in interest rates. The opportunity for homebuyers is less demand and a higher conforming loan limit. 

An excerpt from this episode:

So the good news for home buyers today is the ability that we do still have a decent amount of inventory today that will shrink as we head towards the end of the year. And we're going to see things change. As we see the economy go into a recession and as we see interest rates possibly stabilize and, or even go down later into 2023, as we do enter into a recession, we could see that demand pick up again, putting pressure on limited inventory and increasing home prices even further. But people keep talking about this bust. What is happening around real estate? Are we in a recession? Lawrence June said that we're in a housing recession because we've seen six months of existing home sales down; NAHB, the home builders association, is saying that we're in a housing recession because they're seeing their permits and starts down.

Completions are up as they're rolling off inventory. So bad news, bad news is this inventory because as much as people are talking about a housing bubble or bust or decrease in prices, yes, we are seeing home prices. 40% of them coming off their original asking before they sell, becoming more realistic on their opportunities to sell that home, right? Not for what their neighbors sold for two months ago, but for what the market is calling for today, while we're seeing home sellers, reducing prices, we are not seeing loss in value. We are seeing those values come back in line, back towards our historic numbers. Do you know that the historical average of appreciation nationwide is 3.6%? Our average price growth here in the DMAR Metro is 6%. We've been well above that for a long time. We just put out a post yesterday that talked about the fact that even if I have a 3.9%, which is what it ticked up to 3.6 to 3.9 after 20 twenty's appreciation even higher than that after 2021.

But even if we saw a 3.9% historical appreciation for the next five years, we're still talking about equity growth for homeowners over the next five years of close to $150,000 real estate is a long-term play. It is an equity opportunity that continues to be around. Knowing that short term, we've got a little opportunity to buyers to get in with a higher loan limit, to squeeze in with more inspection items possibly on that objection, right? Getting it at or below is good news for home buyers. Affordability is obviously the bad news for home buyers, but homeowners continue to have the best news. Unless you have a homeowner who's looking to sell and wants top dollar, the top dollar they could have gotten in April and don't wanna become more realistic about what the numbers look like today. That might be bad news for home sellers, but homeowners have nothing but equity gains.

Nicole Rueth
The Rueth Team Powered by OneTrust Home Loans
750 W Hampden Avenue, Suite 500 
Englewood, CO 80110
303-214-6393
www.TheRuethTeam.com 

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