Loan Limits Are Going Up – What Does This Mean for PDX Home Buyers?

Understanding Rising Loan Limits for Portland Buyers

Recently, the FHFA announced another increase for Fannie and Freddie conforming loan limits. For the second year in a row, the FHFA raised the loan limits, and this year, the limits rose from $424,100 to $453,100 for 2018.

Prior to last year’s increase, the FHFA hadn’t raised the loan limits since 2006. So what does this mean for Portland homebuyers? This year, Portland-area buyers will be able to apply for larger Fannie Mae- and Freddie Mac-backed mortgages. But how much will this really help the local market? The jury’s still out, but let’s take a closer look at rising loan limits in Portland.

Comparing Home Costs to Loan Limits

When the loan limit rises this March, homebuyers will benefit from a 6.8 percent increase in the amount available for single-family home loans. According to the Chicago Tribune, “The reason for the 2018 uptick is a 6.8 percent increase, on average, in home prices nationally between the third quarters of 2016 and 2017, according to the FHFA, which regulates Fannie Mae and Freddie Mac.”

While the increase in loan limits alleviates some buyer concern, Portland home prices are rising faster than conforming loan limits. According to the S&P CoreLogic Case-Shiller index, Portland-area home prices climbed 8.9 percent during 2017. And in the year prior, Portland home costs spiked an even larger 11%. So what does the misalignment in home costs and loan limits mean for Portland buyers?

As Portland’s population continues to grow, the unemployment rate stays low, and new construction remains outpaced by buyers, the Portland real estate market will continue to grow. Fortunately, while the swell in home costs has outpaced the rise in loan limits in years’ prior, in 2018, there’s a change on the horizon.

According to Portland housing market predictions, “in 2018, [we] should experience growth, likely a 4% to 8% hike in housing prices.” While the market is predicted to remain healthy, the slow uptick in increasing home listing prices creates an opportunity for buyers who depend on home loans.

Josh Lehner, an economist at the Oregon Office of Economic Analysis, shares that “there’s no question housing prices have been going up and continue to go up…[but] it’s getting better.”

Next Steps for Portland Buyers

According to OregonLive, the median price of a Portland home totaled $380,000 (as of September). As the rise of housing prices slows and loan limits increase, spring 2018 should emerge as an ideal time for Portland buyers to purchase a home.

Realtor Dana Berry shares, “For the first time, maybe in years, first-time buyers are in a good place to match expectations to reality when it comes to buying a home in Portland.” And the rise in loan limits only helps this case.

Our advice? It may be best to remain optimistic. If you’re considering buying a home when the loan limits rise in 2018, be sure to reach out. At Options Financial, we’d love to help you lean more about home loans options for the season ahead.

Resources Are Available When You’re Ready to Buy

Are you sold on buying a home? It’s a daunting process, sure, but Options is here to help you through every step. We have a number of special loan programs and people at the ready to connect you to the resources you need to help you make buying a home your reality. We believe homebuyers deserve all the assistance they can get.

With that in mind, we want to introduce you to a mortgage program that’s been around for decades: the Mortgage Credit Certificate, available through Options Financial. Much of the public remains unaware of the program, but taking advantage of it means potential money saving and tax credit benefits for you.

Many loan officers are also unaware of the savings that can be leveraged via the program for qualifying buyers. The Mortgage Credit Certificate requires special certification, which we have, and are able to provide to our clients. If you haven’t owned a home in the previous three years, you meet certain income and purchase price restrictions, and you plan to live in your new Portland-area home as your primary residence, you could qualify for substantial savings.

Learn more about the Mortgage Credit Certificate from Options Financial today.