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| Revised Fannie, Freddie Loan Limits Will Benefit California Homebuyers, But Fall Far Short of What Is Needed |
LOS ANGELES, Nov. 30 /PRNewswire/ -- More than 12,960 families in
California will be able to benefit from Fannie Mae's and Freddie Mac's
announcements today that each will increase its single-family mortgage loan
limit from $333,700 to $359,650 in 2005, according to an analysis by the
California Association of REALTORS(R) (C.A.R.).
"Once again, although the new conforming loan limits will help some
homebuyers qualify for a lower-cost loan, they do not go far enough to benefit
most homebuyers in California," said C.A.R. President Jim Hamilton.
"The median price of a home in California is 28 percent higher than the
new loan limit announced today," he said. "Conforming loan limits need to
more accurately reflect the cost of housing in California."
The current median home price in California is $460,370, an increase of
21.4 percent compared to a year ago and more than 28 percent higher than the
national conforming loan limit of $359,650. In addition, California has
17 counties with a median-home price above the national conforming loan limit.
Based on its 2005 sales projection, C.A.R. expects that 301,670 sales in
the state will fall into the price range implied by the higher loan limits, an
increase of 33,450 homes over the 2004 loan limits. The $25,950 increase in
the single-family mortgage loan limit translates into an additional
12,960 households able to take advantage of savings provided by having a
Fannie Mae or Freddie Mac qualifying mortgage.
Regionally, an additional 3,500 households in the San Francisco Bay Area
and 5,580 households in the five-county Southern California region will be
able to benefit from the increased loan limits, according to C.A.R.
economists.
The C.A.R. statistics do not include refinance activity.
Based on a typical 25 basis point spread between conforming and jumbo
mortgage loan rates, a typical California homebuyer will save up to $21,400
over the life of a 30-year mortgage. In some areas of the state, the recent
spread between a conforming and jumbo loan has been as much as 40 basis
points. Households in these areas could save up to $34,350 over the life of a
30-year mortgage.
Fannie Mae and Freddie Mac also announced new limits for multi-unit loans
for 2005: two-family loans to $460,400; three-family loans to $556,500; and
four-family loans to $691,600.
The California Association of REALTORS(R) (http://www.car.org) is one of
the largest state trade organizations in the United States, with more than
150,000 members dedicated to the advancement of professionalism in real
estate. C.A.R. is headquartered in Los Angeles.
SOURCE California Association of REALTORS
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CONTACT:
Mark Giberson of California Association of
REALTORS, +1-213-739-8304, markg@car.org
