Friday, November 7, 2008

FHFA announce conforming limits, Ventura County adversely affected.

On January 1st, 2009 the new max conforming limit for the country will be $625,500 down from the current jumbo conforming max of $729,750. I think this change will hurt the mid to mid-high end of the market a lot. Ventura County it is a bit worse in that the FHFA decided that the max conforming limit will be $598,000. These conforming limit changes combined with the guideline changes from October and the new ones coming online in January (Freddie Mac will only allow a max-DTI of 45% on the vast majority of its loans) will significantly affect effective demand moving forward. This isn't even addressing the economic issues facing these areas which will affect demand. Just assuming the pool of available buyers remained normal demand would fall. Only price declines can solve the issue of finding an available buyer when loan demand is contracting.

3 comments:

Noz said...

Good to hear.

Anything that puts pressure on bring down these pathetically high prices will get my vote and them some.

It's time to come back to reality. Regardless of the consequences.

Rob Dawg said...

$598,000 according to the OFHEO site.

Effective Demand said...

Rob .. ? I posted it was 598k in Ventura in the post. I had thought that was a significant development.