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Home Values Rose For the 4th Straight Month

Oct 5, 2011 | Housing Analysis

Home Price Index from April 2007 peakThe government is confirming what the private sector has already shown —  home values are on the rise.

The Federal Home Finance Agency’s Home Price Index shows home values rose 0.8% in July.

July marks the fourth straight month that home values climbed and the FHFA’s Home Price Index is the latest in a series of “rising home values” reports — an encouraging trend for buyers and sellers in Fitchburg and nationwide.

Last week, the S&P Case-Shiller Index showed home value up nearly 1 percent in July. CoreLogic reached a similar conclusion.

Nationwide, values are back to their highest levels since November 2010. Clearly, the housing market in Massachusetts is moving in the right direction. Or is it?

Although the data from the government and from private firms such as CoreLogic is encouraging, it’s also flawed. As such, we have to be careful about the conclusions we draw from the data. (more…)

Conforming Loan Limits Drop In High-Cost Areas

Oct 4, 2011 | Mortgage Guidelines

Conforming Loan Limits lowered in 2011For homeowners in high-cost areas nationwide, conforming and FHA loan limits have dropped by as much as 14 percent.

Effective October 1, 2011, the temporary mortgage loan limits that allowed for non-jumbo loan sizes of up to $729,750 are no longer.

$729,750 is above the “normal” loan limit of $417,000.

The elevated limits were put in place in 2008 as the economy and financial sector entered its crisis. At the time, there was little private money to serve buyers and would-be refinancers whose loan sizes exceeded Fannie Mae and Freddie Mac’s maximum $417,000 loan limits.

For most people whose loan sizes exceeded that threshold, mortgage financing was unavailable. There were no lenders to back the loan size.

This was of particular importance in places such as New York City, Los Angeles and Washington, D.C. where home prices routinely top $1 million. For people in these areas, unless they had a downpayment that could lower their respective loan sizes to $417,000 or lower, mortgages were mostly unavailable. (more…)