BOULDER – Home prices across most of the country have been on the rise following the Great Recession. For many homebuyers, rising costs and low supply makes homeownership a difficult dream to achieve. As a response to the steady increase in asking prices, the Federal Housing Finance Agency has announced an increase in conforming mortgage loan limits in 2018. Here, we cover the details of this limit increase, and how it may affect you.
Why This Information Is Important For Buyers
If you’re planning to purchase a home in 2018, it’s important to have an understanding of loan limits for the counties that you’re considering. Many first-time homebuyers prefer to seek out conforming loans, which used to be capped at an average of $424,100. Since most homes have appreciated at a rate of 6.5% in 2017, the FHFA has recognized the need for a bump in conforming loan amounts. Effective as of January 1, buyers can expect a loan limit increase of approximately $29,000. Keep in mind that the new loan amounts aren’t the same in every county, and areas that are in extremely high demand will benefit from a larger limit ceiling. For example, King County and the surrounding areas have seen the most substantial increases–$74,750, to be exact. For a closer examination of the changes, take a look at the information below:
- 3,011 counties can expect to see their loan limits increased.
- For many areas, the conforming loan limit has increased to $453,100.
- The new maximum conforming loan limit is set at $679,650 for counties with high costs of living.
What Does This Mean For Boulder County?
If you’re hoping to purchase a home in the Boulder area, keep in mind that the new conforming loan limit has been increased to $578,450 in 2018. The previous limit was $529,000, so this increase could prove helpful to buyers. Since the Boulder area is such a coveted place to live, many buyers have needed to seek out jumbo loans. Although the median home price in Boulder hovers around $885,000, buyers hoping to stay below $578,450 are in luck, as they’ll no longer need to apply for a jumbo loan. This has the potential to make quite a difference in the required down payment amount, since jumbo loans tend to require larger down payments.
2018 is predicted to be another strong year for the housing market. The economy is booming, and unemployment rates are down. As millennials continue to break into homeownership, the new conforming loan limit increases will be a positive change for most buyers.
By Jennifer Egbert. Jennifer is a Realtor at Porchlight Real Estate Group and specializes in Luxury neighborhoods, home builders and current market conditions. To learn more about the Boulder real estate market, visit jenniferegbert.com, e-mail [email protected] or call 303.619.3373.