Loan Limits Have Increased!

 “With California’s home prices climbing so significantly during the pandemic, C.A.R. (California Association of Realtors) commends the FHFA (Federal Housing Finance Agency) for recognizing the record-setting home price increases and raising maximum conforming loan limits in high-cost markets to $970,800,” said 2022 C.A.R. President Otto Catrina. “Conforming loans provide safe and affordable mortgages to California’s homebuyers across the state. If loan limits were not allowed to increase every year to keep up with home prices, first-time and moderate-income  homebuyers across the state would not have access to affordable mortgage capital, which reduces homeownership opportunities for those who need it the most.”

California Association of Realtors reminds us that "The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically have tighter underwriting standards and sometimes carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable."

The Long Beach average home price in November was $951,203.

 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

November Active Listings Report in Five So Cal Counties

No housing market crash for 2022, at least not in terms of price (believe it or not!).

But there is a huge continuing problem between supply and demand-- very limited supply and huge demand brought on by very low interest rates. In beginning of 2019 there were the most homes (40,000 homes) on market since 2012, but lowered interest rates that year started off low inventory in 2020 (29,000 homes) with a big dip after the pandemic, and then the lowest inventory in years in 2021 (17,000 homes), and will continue this way into 2022.  We should have more than double the inventory we have right now, per last year's inventory levels.  The five counties in Southern California are all down in total home inventory between 3% and 5%, with Orange County at its lowest inventory ever (just over 1700 homes on market right now--on (l1/12/221)**

(Julia's Update Note:  Active listings in the MLS on 11/15/21:  San Bernardino County:  2515 single family homes; San Diego: 1550 single family homes; Orange County: 1182 homes; Los Angeles County: 5000+ homes; Riverside County: 2856 homes.)

Interest rates will probably stay under 3.5%, and it will still be a seller's market.  As long as rates stay low, the market will favor sellers, a trend that may well continue all through 2022.  Home values will continue to rise. And see the CAR 2022 Market Report Summary, an upward increase of 5.2% is predicted with total downward trend in number of sales for next year.

Calif Assoc of Realtors 2022 Market Report

 

** Information thanks to Steven Thomas and his weekly Facebook streaming Market Report every Friday)

 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Buying Another Home? Have You Calculated All Potential Monthly Costs?

If you're currently thinking of buying, you're probably think a lot about the current interest rates and your monthly mortgage bill.

But there's more.

It's realistic in the Long Beach area market to consider at least a purchase price of $600,000, so for this post I'll assume the buyer has an approval for this price.  The figure at the right assumes a  down payment of 20% and a loan term of 30 years, interest rate at 3.16%.  As shown, the monthly principal and interest is $2065.35 every month.  

Since this buyer is putting down 20%, the lender usually allows property taxes to be paid directly by the homeowner, not paid into an escrow account.  

Closing costs and the expenditures associated with moving into a new property are not included in these amounts, but buyers must at least consider the total cost of closing escrow. Your lender will be including that in estimates so they should not be a surprise.

So looking at other costs associated with being a homeowner, which the buyer should pay attention to before signing a contract with a seller, there are property taxes, home insurance, and "other costs".  It's the "other costs" that often the homeowner does not calculate directly, or even deal with until it's time to leave the home.  That can often lead to what's known as deferred maintenance, something to be avoided. Because as the deferred maintenance piles up, it leads to faster deterioration.

At least 1% of home's value should be included on an annual basis for such things as roof repair, termite or pest control, paint or stucco repair, fence repair, garage door servicing, to name a few.  If the home predates 1932, foundation or retrofit may come up (home before then were not required to be bolted to the foundation). 

Although used in this scenario, a 20% down payment is not required to buy a home, FHA loans only require 3.5% down payment.

To discover different scenarios, go to the Calculator link for all types of calculations, not just real estate, and read the notes below--they are very informative.  The Consumer Financial Protection Bureau is also a useful source to consult.

For more information about buying a home, please contact me.  I have over 25 years of experience helping clients make home decisions.

 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996