Freddie Mac and Fannie Mae home prices have increased an average of +6.5% nationwide in Q3 2017 compared with Q3 2016. according to the Federal Housing Finance Agency (FHFA). In some states, the increases are higher. Take a look…
1. Seattle – 14.6%
2. Arizona – 10%
3. Washington State – 11.5%
4. District of Columbia – 9.6%
5. Nevada – 11.6%
These state gains surpassed pre-recession peaks.
The FHFA calculates its home index by using home sales price information from mortgages sold to or guaranteed by Freddie Mac and Fannie Mae. The agency does not include high-end homes that are purchased with cash or with jumbo loans.
Freddie Mac and Fannie Mae offer consumer programs that allow borrowers to purchase a home with 1% of the home sales price and with no personal down payment.
Additionally, Freddie and Fannie have new conforming loan limits for 2018. These limits range between $424,100 and $453,100. New loan ceilings for a property in the highest cost areas will be $679,650 or 150% of the $453,100 figure.
First time buyers utilizing Freddie and Fannie services and resources have increased by 42% since 2013. Additionally, qualifying ratios for loans with Freddie and Fannie have been upped to 50%.
The only caveat to these ratios comes from the American Enterprise Institute. It claims that such a large percentage of buyers with so “little skin in the game” is dangerous in terms of increased risk. Obviously, no one wants a repeat of the housing crisis.
The S&P CoreLogic Case Shiller Index tells us that home prices are rising faster than any other time since June 2014 and that these prices have surpassed pre-recession peaks. Just three cities are enough to tell the story…home prices in Seattle are up +12.9%, Las Vegas +9% and San Diego +8.2%.