Home News US home buyers could soon get $1m mortgages with just a 3% deposit

US home buyers could soon get $1m mortgages with just a 3% deposit

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Thanks to recent actions taken by government agencies, more Americans than ever will be able to get a million-dollar home loan.

The Federal Housing Finance Agency announced this week that the limit on mortgages backed by federally backed mortgage companies Fannie Mae and Freddie Mac has been raised to just over $1 million for the first time in history.

The new limit will affect homebuyers looking to take out mortgages as low as 3% on homes in more expensive areas like New York. Los Angeles.

More than 12% of all homes sold in October were priced above $1 million, according to recent data.

In the past, Americans had to put down at least a 20% down payment to get a mortgage of that size.

Americans living in certain designated ‘high-cost’ neighborhoods could secure a $1 million mortgage in 2023 with a 3% drop

The Federal Housing Finance Agency announced on Tuesday that the previous limit of $970,800 was raised to $1,089,300.

The Federal Housing Finance Agency announced on Tuesday that the previous limit of $970,800 was raised to $1,089,300.

The Federal Housing Finance Agency has designated approximately 100 locations across the United States as high-cost markets, eligible for $1 million mortgages.

More than 12% of all home sales in October were priced above $1 million, according to recent data from Realtor.com.

However, the $1 million limit does not apply to most parts of the country.

Americans living in areas where the cost of living is not as high as in big cities such as Los Angeles and New York can apply for loans of up to $726,200. That number is up from the previous cap of $647,200.

Federal Housing Finance Agency officials say they use a formula that takes into account factors such as the cost of local housing and the overall cost of living.

We hope that the price cap increase will help more Americans avoid using private, non-federally-backed mortgage servicers.

The new $1 million is for about 100 high-cost locations in the US, including cities like New York and Los Angeles.

The new $1 million is for nearly 100 high-cost regions in the US, including cities like New York and Los Angeles.

High cost of living makes housing more expensive in big cities

High cost of living makes housing more expensive in big cities

For homes not located in high-cost areas, the new cap will be $726,000.

For homes not located in high-cost areas, the new cap will be $726,000.

In addition to attracting new potential homebuyers, the new cap expands the realm of possibilities for people in a market that has been severely restricted.

“For buyers, it opens up a whole new set of homes that we think may have previously exceeded their budget for monthly mortgage payments,” said Darryl Fairweather, chief economist at Redfin. Wall Street Journal.

Home prices fell for the ninth month in a row in October, but overall US house prices are still very high.

Officials hope the new caps will give a boost to those who want to buy but are feeling uneasy.

Experts say the new cap will expand the realm of housing available to people in the market and bring in new potential homebuyers.

Experts say the new cap will expand the realm of housing available to people in the market and bring in new potential homebuyers.

Kate Wood, a home and mortgage specialist at NerdWallet, also spoke with the Wall Street Journal, saying hiking can have a net positive impact for people looking for a home amid economic uncertainty. I was.

“Buyers aren’t always getting a bargain, but needing to save $30,000 instead of $200,000 on a down payment can make it easier to get a million-dollar home. said Mr. Wood.

Many homebuyers are concerned about a lack of similarly priced homes and an overall fear of a possible economic recession triggering a pullback.

a study The report, released by Bloomberg in October, suggests that the US is almost certain to enter a recession at some point in the next 12 months.

Recession likely to last eight months

Recession likely to last eight months

News of the new mortgage ceiling came as average US home prices fell from $450,000 in June to $417,000 today.

Still, it may be premature to assume that real estate volatility has reached a stopping point, writes a researcher at the National Realtor Association.

The 30-year fixed-rate mortgage rate is now at 6.49%, down from 7.08% on 10th November.

That’s the biggest three-week drop in 14 years, but your monthly payment is still about $900 a month higher than this time last year.

The data is a stark reminder that despite the recent hiatus, buyers may still be struggling with affordability in a market that is noticeably more expensive than it was a year ago.

A new report reveals that median U.S. home prices have fallen to $417,000, but its authors say it may be too early to go out and buy.

A new report reveals that median U.S. home prices have fallen to $417,000, but its authors say it may be too early to go out and buy.

Realtor.com chief economist Daniel Hale warned that while prices have improved over the past few months, still-high home prices and rising interest rates are limiting Americans’ options.

“Prices are down month by month, but still up double digits from a year ago,” Hale wrote in the agency’s report released Thursday, in which he wrote, “Mortgage interest rates is also rising, so more people are buying homes.” More expensive than last year.

Hale said the unsustainable levels of affordability that have persisted since the pandemic continue to deter buyers, and as more homes hit the market, a massive slowdown in residential real estate is on the cards. He added that there is a possibility.

The researcher wrote: “By the end of the year and possibly early next year, there will be fewer newly listed homes on the market.”

The new numbers recorded by Realtor.com come as a pandemic-fueled surge in home buying has pushed the number of homes for sale to an all-time low.

The new numbers recorded by Realtor.com come as a pandemic-fueled surge in home buying has pushed the number of homes for sale to an all-time low.

Hale’s grim projections, along with those of several other high-profile investors and companies that aired last week, saw a 46.8% increase in the number of homes on sale this month compared to the same period last year. is showing.

In real numbers, this increase means an additional 240,000 homes will be sold on any given day of the month compared to 2021. This increase is compounded by the fact that property owners are struggling to sell their homes at exorbitant prices.

With a record amount of homes left on the market, new listings are down 17.2% for the year, Realtors said, adding that this drop in demand means properties typically spend 56 days on the market. It adds that it spends Year.

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