Home Sales Forge Ahead

A surge in the Northeast and a smaller gain in the South pushed existing-home sales up in November for the third consecutive month, according to the National Association of Realtors®.
Total existing home rose 0.7 percent to a seasonally adjusted annual rate of 5.61 million in November from 5.57 million in October. November’s sales pace is now the highest since February 2007 and is 15.4 percent higher than a year ago.
Lawrance Yun, NAR chief economist, says it’s been an outstanding three-month stretch for the housing market as 2016 nears the finish line. “The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates rose have combined to drive sales higher in recent months,” he said. “Furthermore, it’s no coincidence that home shoppers in the Northeast — where price growth has been tame all year — had the most success last month.”
The median existing-home price 3 for all housing types in November was $234,900, up 6.8 percent from November 2015 ($220,000). November’s price increase marks the 57th consecutive month of year-over-year gains.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.77 percent in November from 3.47 percent in October (highest rate since January at 3.87 percent).

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Conforming Mortgage Limits Rise for 2017

The federal government is increasing the limit for conforming mortgages from $417,000 to $424,100 in most regions of the United States starting Jan. 1, 2017, the Federal Housing Finance Agency announced Wednesday—the first such increase since 2006.
The approximately 1.7 percent bump in the baseline conforming loan limit follows the Agency’s announcement that the average U.S. home price has returned to its pre-decline peak, which it hit in the third quarter of 2007. The FHFA bases the loan cap on its quarterly Housing Price Index, which gauges average single-family home prices. The index rose 1.5 percent during the third quarter of 2016 and is up 6.1 percent over the past year, enough to push it above its previous high point.
Conforming loan limits are significant because they apply to home loans that meet the underwriting guidelines of Fannie Mae or Freddie Mac, the government-sponsored entities that acquire mortgages from lenders and ensure a steady flow of money to the mortgage market. Interest rates for nonconforming, or jumbo mortgages, are generally higher than rates for loans that fall under the cap, and these types of mortgages can be more difficult to obtain.
National Association of Realtors President William Brown said, “Today’s conforming loan limit increase is a much-needed recognition of rising home prices in high-cost markets, and a help to first-time and lower-income borrowers looking to utilize an FHA mortgage. Credit remains tight, but this decision will help more qualified buyers address the hurdles and high costs standing between them and the dream of homeownership.”