Conforming loan limits for Fannie Mae have increased for 2017!
With the increase in housing affordability in the real estate market, conforming loan limits have increased for the first time since 2006. Here are the new limits for Fannie Mae loans for 2017 in Los Angeles county:
Conforming Loan Limits
1 Unit: $424,100
2 Units: $543,000
3 Units: $656,350
4 Units: $815,650
Conforming Loan Limits for High Cost Areas
1 Unit: $636,150
2 Units: $814,500
3 Units: $984,525
4 Units: $1,223,475
What does this mean for home buyers? Buyers have an opportunity to borrow more money (with a Fannie Mae product) which is good news since home prices have continued to climb since the market began its rebound toward the end of 2012. In fact, for the first time since the Great Recession, the average US home price has returned to pre-market crash levels. With the real estate recovery, the conforming loan limits should continue to have increases on an annual basis.
There is also talk about interest rates increasing over the next year. They have already ticked up above 4% for the first time in a couple of years. For those home buyers who are at their maximum borrowing power already, any additional rate increase could prevent them from getting a loan. And if rates continues to climb, it could have a slow down effect on the market, and ultimately put downward pressure on prices. But for now, for homes priced at $1.5 million and below, the tight inventory and high demand has continued to push prices up.