These HUGE updates in the real estate market could significantly impact your home buying or selling plans. And they’re not just interesting – they're potentially game-changing!
Increased Loan Limits
Let's dive into the big news first: the increase in loan limits. The conventional loan limit has now been increased to $765,550, and the FHA loan limit has risen to $621,000.
What does that mean?
Any mortgage amount above these new loan limits is considered a Jumbo loan which usually has stricter requirements to qualify such as higher credit scores, higher down payments, and lower debt-to-income ratios.
You can now buy a home for up to $805,000 with only 5% down using a conventional loan. If you’re getting an FHA loan, you can now buy a home for up to $643,000 with only 3.5% down. This is great news as it opens up more homes to more buyers with less money out of pocket.
Need to speak with a lender? We have a great one we can connect you with!
Mortgage Rates Decline 1%
In more good news, mortgage rates have decreased by a full 1% over the last month. Our lender is now quoting Buyers with good credit somewhere between 6.85% - 7%. This is a DRAMATIC savings in interest. It appears we have hit the peak for interest rates and they are now on the decline.
30 days ago, buying a home you would have received a rate at or above 8%. Now with these rates, we’re seeing buyers save close to $500 per month compared to just a short time ago. If you’re one of those people that has been “waiting for interest rates to come down”, that time is now.
The Optimal Time to Buy? A Three-Month Window of Opportunity
Based on these developments, its our opinion that the next three months present a unique window of opportunity for homebuyers:
Seller Incentives
Sellers are still currently motivated and we’re seeing lots of deals with interest rate buy downs. That means you can have payments based on 4% rates or maybe even in the 3% range and it’s paid for by the seller! Watch this video if you want to know more about how interest rate buy downs work.
Lower Buyer Demand
Many buyers have been saying they’re pausing the search “until the market calms down” or “until rates come down”. Well that time is here and most Buyers don’t even know it yet. By the time that news becomes more well known in the new year, there is going to be increased competition for homes again making it harder to get the great deals that are available now.
Anticipated Market Shift
As more buyers enter the market in the new year, drawn by lower interest rates, higher loan limits, and normal seasonality (the market always picks up in February/March) we expect to see an increase in demand. And if rates continue to come down even further, this will only increase the demand more leading to a rise in home prices.
Opportunity for Sellers
For those contemplating selling, these market conditions are equally favorable. The expanded loan limits and reduced interest rates are likely to attract a wider pool of potential buyers off the sidelines, making it an excellent time to list your property.
The days of 50+ offers $50,000 above the appraised value are certainly long gone, but well priced and well-marketed listings are still selling very fast and for top dollar.
In Conclusion
Whether you're in the market to buy or sell, these updates represent significant opportunities. As one of the top real estate teams in Florida, we're here to provide you with the guidance and expertise needed to navigate these changes effectively. If you have any questions or need advice tailored to your specific situation, please don't hesitate to reach out.
Posted by Andy Mandel on
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