The Nashville MSA (Davidson, Williamson and five surrounding counties) now has a loan limit for single-family homes of $432,500 for FHA, Fannie Mae, and Freddie Mac. Most other areas in Tennessee have a FHA loan limit of $271,050 for single family homes.
The National Association of Realtors expects the impact on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board.
The volume of existing-home sales is also expected to remain stable through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by NAR.
Lawrence Yun, NAR chief economist, says many buyers have been waiting for these higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he says. “Therefore, a notable rise in home sales can be anticipated in the second half of the year.”
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, held at a stable level of 85.9, unchanged from December, but was 19.6% below the January 2007 reading of 106.8.
“This additional sign of a stabilizing market is encouraging, and our members are telling us there’s been a pickup in shopping activity,” Yun says. “Our hope is that the increased traffic of buyers looking at homes will translate into more contract offers.”