The Federal Housing Finance Agency announced new baseline conforming loan limits for Fannie Mae and Freddie Mac in 2022: $647,200
This is an 18% increase from the 2021 limit of $548,250 and marks the sixth consecutive year of increases from the FHFA.
This is important because now buyers and borrowers can purchase a higher priced home and still stay within conforming loan guidelines. That means easier qualifications at higher price points.
In 2016, the FHFA increased the Fannie and Freddie conforming loan limits for the first time in 10 years. Since then, the baseline loan limit has gone up by over $230,000.
These new limits apply to conventional, conforming loans (those sold to or backed by Fannie Mae and Freddie Mac), for both refinances and purchases. Any loan amounts above these limits would be considered “jumbo” loans and fall outside of conventional guidelines.
Do I have to wait until 2021 to take advantage of a higher conforming loan amount?
Actually, no. The change actually applies to the date that Fannie and Freddie sign off on the new loan (either via “delivery” or “securitization”).
Essentially, any loan originated today would most likely close in 2021 and fall under the new loan limits.
Good news on the home appreciation front…real estate valuations are continuing to increase at a rapid pace!
Check out these numbers…
CASE-SHILLER
The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices rose 1.2% in August and 20% year-over-year, which was unchanged from the previous reading.
This was the first time since early 2020 we have not seen a year-over-year increase, which means that we might have reached the height of annual growth and we will start to see those appreciation numbers slow a bit.
With that said, it’s not that prices are declining, they are just increasing at a slower rate.
As you can see above, Phoenix, San Diego, and Tampa reported the highest annual gains.
FHFA
The FHFA (Federal Housing Finance Agency) released their House Price Index, as well. This measures home price appreciation on single-family homes with conforming loan amounts.
Home prices rose 1% in August of 2021 and are up 18.5% year-over-year, down from 19.2%.
Believe it or not, this is the first time we actually saw prices moderate on an annual basis in quite some time. We are still seeing home prices rise, but just at a slightly slower pace.
This is great news for homeowners, as their equity position has increased tremendously over the last 3+ years.
If I can be of help in strategizing on a purchase or refinance, don’t hesitate to reach out, as it would by my pleasure to do so!
The media is reporting that there is an affordability crisis and discouraging potential home buyers. Unfortunately, this narrative is completely wrong, as homes are more actually affordable now than they have been in some time.
As we all know, home prices are appreciating. When buyers hear that prices are going up, it’s normal to think a home will cost more as the trend continues.
The way the housing market is positioned today, however, low mortgage rates are actually making homes more affordable, even as prices rise.
Understanding Home Affordability
Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.
There are three main factors that go into determining how affordable homes are for buyers:
Mortgage Rates
Mortgage Payments as a Percentage of Income
Home Prices
The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:
“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”
Why are homes so affordable today?
Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s home buying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.
If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home.
With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.
Bottom Line
If you’re thinking of making a move, now is a great time to take advantage of the affordability that comes with such low mortgage rates.
Whether you’re thinking of purchasing your first home or moving into a new one and securing a significantly lower mortgage rate than you may have on your current house, please do contact meso we can determine your next steps in the process.
Deciding between buying or renting your next home? It’s true that home values have gone up quite a bit, but so have rents.
In fact, the largest landlord in the US, Invitation homes, said that rents have gone up 14% since last year.
And that’s not all – they forecast that rents will continue to go up about 6% annually
So, while it’s true that initially purchasing a home will be more expensive, your mortgage payment will remain relatively stable into the future. Whereas your rental payments will likely rise significantly in the years to come.
There are other amazing benefits that come with buying a home, including pride of ownership, more freedom in renovating and design, and of course building equity.
And because of increasing demand and tight supply, it looks as if home values will be well supported, and many are forecasting home prices to move higher.
I can give you a complete analysis with statistics for your specific zip code so you can make accurate comparisons and see which choice is best for you. Give me a call today to learn more.
Visualization is one of the primary techniques used in sports psychology today – and one of the most underutilized by athletes. An athlete’s performance is often the result of what’s happening inside his or her head, or more specifically the movies and soundtracks playing inside that head!
Performance visualization is used by virtually all great athletes and research has shown that, when combined with actual practice, improves performance more than practice alone. Imagery also isn’t just a mental experience that occurs in your head, but rather impacts you in every way: psychologically, emotionally, physically, technically, and tactically.
Think of mental imagery as weight-training for the mind
Overriding Factors
There are two keys principles to keep in mind when practicing visualization. The first is, your practice needs to be consistent. 10 minutes a day every day, will always beat an intense hour long session once a week.
It helps to make a commitment to practice your visualization the same time every day. First thing in the morning as close to waking as possible is ideal. This is because the mind is still slightly lucid at this time, which makes it easier to conjure up images.
The second key principle is you must stay positive in your thinking. Even if you can’t quite see crystal clear images yet, you will still gain huge benefits from your visualization practice. Trust me, it still works. For some people that will be feeling the image, or just getting a sense of what it might look like. Wherever your current level is, nurture it and allow it to grow.
Accept that you can’t always perform the way that you visualized
Research has also indicated that the act of envisioning a relevant muscle movement can potentially result in electrical activity in the specific muscle, despite the fact that there is the absence of the actual movement of the muscle.
That same electrical activity bears a resemblance to the electrical movement that occurs during the actual movement. In this regard, the relevant muscles are primed for the upcoming physical activity.
Also, you should visualize successful outcomes…
Success Story
Sports psychologist Patrick Cohn recently shared a story from USA volleyball players Alix Klineman and April Ross, who won the gold medal in beach volleyball at the 2020 Tokyo Olympics.
Klineman/Ross became only the second U.S. women’s duo in history to win an Olympic gold medal in beach volleyball.
When asked how she pumps up and prepares for a game, Klineman pointed to visualization as a significant component.
KLINEMAN: “I do some visualization, which has been really powerful. I visualize myself in my body, so instead of looking at myself from another perspective, I see myself on the court, going through different skills and doing them really well. It’s like this positive reinforcement of knowing what it feels like, looks like, and how to execute it at a really high level… There’s a really powerful connection between body and mind, which I think a lot of people don’t realize.”
Visualization or mental rehearsal is a powerful mental tool to raise the level of your game. When you use mental rehearsal with your physical training, you will improve consistency, you mental game, and take your game to a new level.
Per Cohn, if Olympians use visualization to achieve greater results, you can also raise your game by adding visualization to your daily training schedule.
Finally, check out this video from one of my favorite sports psychologists, Dr. Patric Cohn. I’m a big fan of the good doctor, as he really values and emphasizes the power of visualization in sports. Although this isn’t the most dynamic video you’ve ever seen, it’s content is extremely powerful.
Thomas Eugene Bonetto
Mortgage Loan Originator
NMLS: 1431961
About The Coach
Tom Bonetto has been helping his customers and players achieve their best for nearly 30 years. His goal is to provide both a superior customer experience and tremendous value for both his business associates and his players alike.
The views expressed are my own and do not necessarily reflect those of Starlight Mortgage.