FHA Ups Its Loan Limits Too by Ron Schulz



Brought to you by Ron Schulz




For the week of december 9, 2019




  The only people with whom you should try to get even are those who have helped you.–John E. Southard, author  





The week before last, the Federal Housing Finance Agency [em.mediacenternow.com] raised conforming loan limits for next year, then last week the FHA [em.mediacenternow.com] upped its 2020 limit on loans with down payments as low as 3.5% to $331,760 for most of the country.  

Limits are based on an area’s median home price, so about 70 “high-cost” counties get limits of $765,500. With high building costs, Alaska, Hawaii, Guam, and the U.S. Virgin Islands get a $1,148,400 limit. Please contact us for details. 

The latest National Association of Realtors forecast sees single-family housing starts in 2020 breaking 1 million for the first time since 2007, the year before the housing downturn, providing major relief to the supply shortage.






MORE JOBS, HIGHER WAGES INSPIRE INVESTORS… The absolute blowout November jobs report demonstrated that the U.S. economy remains on solid ground and sent the S&P 500 up nicely for the week.

The Dow and the Nasdaq ended off a tad after a choppy week of trading stemming from worries, then hopes, about a China trade deal, and reports that manufacturing is contracting slightly, though the dominant services sector keeps growing.

All that was overshadowed by November’s spectacular 266,000 new jobs, with prior month revisions taking the total to 307,000, and wages up 3.1% annually. Plus, unemployment is 3.5%, a 50-year low, and consumer sentiment is soaring.

The week ended with the Dow down 0.1%, to 28,015; the S&P 500 up 0.2%, to 3,146; and the Nasdaq down 0.1%, to 8,657.

As stocks slumped Monday, bonds did well, but fell Friday on those strong jobs numbers. The 30YR FNMA 4.0% bond ended unchanged, at $103.75. The national average 30-year fixed mortgage rate was also unchanged, more than 1% below a year ago, in Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… Residential real estate accounts for one-sixth of the U.S. economy. Freddie Mac says “the improving real estate market will support economic growth,” powered by “the strong job market, ebullient market sentiment and low mortgage rates.”






INFLATION QUIET, RETAIL BUSY, THE FED STANDS PAT… Inflation should be up only mildly in November’s Consumer Price Index (CPI). And, hey, those prices remained attractive enough for an expected surge in November Retail Sales. No rate move is forecast for the Fed’s FOMC Rate Decision.

NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.






Forecasting Federal Reserve policy changes in coming months… The futures market has a virtually zero expectation of a rate change at this week’s Fed meet. And the current level should hold through March. Note: In the lower chart, a 1% probability of change is a 99% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

Dec 11 1.50%-1.75%
Jan 29 1.50%-1.75%
Mar 18 1.50%-1.75%


Probability of change from current policy:

Dec 11     1%
Jan 29    10%
Mar 18    21%






  Long-term success comes from not being afraid to try new things–or, more accurately, being afraid, and trying them anyway!   


  Ron Schulz
Senior Loan Officer
NMLS# 266128

6060 North Central Exp #462
Dallas, TX 75206

Office: 214-346-5279
Mobile: 214-794-4014
www.ronschulz.com [em.mediacenternow.com]







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