2022 Agency loan limits now confirmed

sgip

Well-known member
National Standard Conforming Limits

1 unit  $647,200
2 units  $828,700
3 units  $1,001,650
4 units  $1,244,850

Los Angeles / Orange County High Balance Loan Limits

1 unit  $970,800
2 units  $1,243,050
3 units  $1,502.475
4 units  $1,867,275

San Diego County High Balance Loan Limits

1 unit  $879,750
2 units  $1,126,250
3 units  $1,361,350
4 units  $1,691,850

Riverside/San Bernardino Counties - Standard Conforming limits only. No High Balance available

Ventura County - High Balance Loan Limits

1 unit  $851,000
2 units  $1,089,450
3 units $1,316,900
4 units $1,636,550

More info if needed here:https://singlefamily.fanniemae.com/originating-underwriting/loan-limits

 
It's a nice little surprise bump from the previously rumored $625k and $937.5k...

Also this is the single highest increase in history for FHFA limits. Take a look at some recent eyars

2022 647,200 18.05%
2021 548,250 7.42%
2020 510,400 5.38%
2019 484,350 6.90%
2018 453,100 6.84%
2017 424,100 1.70%
2016 417,000    0.00%
2015 417,000 0.00%
2014 417,000 0.00%
2013 417,000 0.00%
2012 417,000 0.00%
2011 417,000 0.00%
2010 417,000 0.00%
2009 417,000 0.00%
2008 417,000 0.00%
2007 417,000 0.00%
2006 417,000 15.95%
 
The previous record increase in 2006 was followed by 10 years of 0% increases.  I'm sure this time is different though.

tic, tic, tic... BOOM
 
Liar Loan said:
The previous record increase in 2006 was followed by 10 years of 0% increases.  I'm sure this time is different though.

tic, tic, tic... BOOM

Yes, we are all worried that prices will drop down to 2020 levels.  I expect the same prediction in Dec 2022 after 5-7% appreciation.
 
AccidentalAnalytics said:
Liar Loan said:
The previous record increase in 2006 was followed by 10 years of 0% increases.  I'm sure this time is different though.

tic, tic, tic... BOOM

Yes, we are all worried that prices will drop down to 2020 levels.  I expect the same prediction in Dec 2022 after 5-7% appreciation.

Spoken like a realtor, circa 2006.
 
Notice the FED balance sheet?
The correlation with housing prices is almost @1


Feds-Balance-Sheet-1.jpg



With so much money in the world today....how will prices drop?
 
Liar Loan said:
AccidentalAnalytics said:
Liar Loan said:
The previous record increase in 2006 was followed by 10 years of 0% increases.  I'm sure this time is different though.

tic, tic, tic... BOOM

Yes, we are all worried that prices will drop down to 2020 levels.  I expect the same prediction in Dec 2022 after 5-7% appreciation.

Spoken like a realtor, circa 2006.

Liar, it ain't gonna happen...we are in a different world with different underlying circumstances.  Loans have been fully underwritten for 10+ years now and buyer strength is much higher than 15 years ago.  Also, buyers are buying to live in the homes versus buying 3-5 homes and speculating like they did back in the bubble days.  I read an article where it talked about that one of the reasons why we have seen increasing housing prices is that lack of enough new construction because builders pulled way back after the great recession.  No big drop is coming Liar unless we get some kind of huge shock in the market.  As you know, I track inventory levels like a hawk and use that as my tea leaf prediction in saying that prices will continue to move up in the near term.
 
Martin - one key factor is jobs; many professional jobs will evaporate in a rising rate environment, and many purchases rely on 2 incomes. The Fed is not the BOJ and they will be forced to raise rates sooner rather than later given the natural inflation hitting us from the supply chains needing to exit China, the cheapest and best factories in the world BY FAR. A Volcker moment  is coming and it will have ramifications for equities and real estate.
 
Will Jerome crash the economy by tapering too hard to tame inflation?
He is hoping inflation will drop if we can get our supply chain sorted.

Currently our supply chain is worse today 12/01/2021 than 2 months ago.
Ocean shipping is even more expensive now.

I may have to increase my prices by 10% again due to ocean freight and Long Beach facilitating payments.
 
OCtoSV said:
Martin - one key factor is jobs; many professional jobs will evaporate in a rising rate environment, and many purchases rely on 2 incomes. The Fed is not the BOJ and they will be forced to raise rates sooner rather than later given the natural inflation hitting us from the supply chains needing to exit China, the cheapest and best factories in the world BY FAR. A Volcker moment  is coming and it will have ramifications for equities and real estate.

I'm not following why rising rates will make professional jobs disappear. Are you suggesting because the cost of capital is increasing that companies will begin laying off people?
 
Cares said:
OCtoSV said:
Martin - one key factor is jobs; many professional jobs will evaporate in a rising rate environment, and many purchases rely on 2 incomes. The Fed is not the BOJ and they will be forced to raise rates sooner rather than later given the natural inflation hitting us from the supply chains needing to exit China, the cheapest and best factories in the world BY FAR. A Volcker moment  is coming and it will have ramifications for equities and real estate.

I'm not following why rising rates will make professional jobs disappear. Are you suggesting because the cost of capital is increasing that companies will begin laying off people?

Yeah, saying professional jobs disappearing due to rising rate doesn't make much sense. High tech companies are desperate in hiring right now. My group had been interviewing candidates and we're getting pretty desperate due to losing those candidates to Apple and Google.
 
Also just historically, from FRED data since 1948, as interest rates go up, unemployment goes down.
 
USCTrojanCPA said:
Liar Loan said:
AccidentalAnalytics said:
Liar Loan said:
The previous record increase in 2006 was followed by 10 years of 0% increases.  I'm sure this time is different though.

tic, tic, tic... BOOM

Yes, we are all worried that prices will drop down to 2020 levels.  I expect the same prediction in Dec 2022 after 5-7% appreciation.

Spoken like a realtor, circa 2006.

Liar, it ain't gonna happen...we are in a different world with different underlying circumstances.  Loans have been fully underwritten for 10+ years now and buyer strength is much higher than 15 years ago.  Also, buyers are buying to live in the homes versus buying 3-5 homes and speculating like they did back in the bubble days.  I read an article where it talked about that one of the reasons why we have seen increasing housing prices is that lack of enough new construction because builders pulled way back after the great recession.  No big drop is coming Liar unless we get some kind of huge shock in the market.  As you know, I track inventory levels like a hawk and use that as my tea leaf prediction in saying that prices will continue to move up in the near term.

Irvine flattened and went slightly negative for three years due to the very minor increase in rates that occurred in late-2017.  Rates would now have to increase a full point from current levels just to reach 2017's low point.  I would hate to see what happens to Irvine if Powell has to do some serious inflation fighting.

OCtoSV said:
A Volcker moment  is coming and it will have ramifications for equities and real estate.

Your are correct, but really, ALL asset classes are severely over priced based on the negative real rates that occurred in response to covid.  People are speculating like never before on anything and everything.  Last time it was limited to housing.  The time before it was limited to NASDAQ stocks.  This time people are speculating on pieces of code (crypto & NFT's), collectibles that were once laughable like Beanie Babies and mass-produced baseball cards, IPO's with not only no earnings but no sales to speak of... The list goes on.

CalBears96 said:
Cares said:
OCtoSV said:
Martin - one key factor is jobs; many professional jobs will evaporate in a rising rate environment, and many purchases rely on 2 incomes. The Fed is not the BOJ and they will be forced to raise rates sooner rather than later given the natural inflation hitting us from the supply chains needing to exit China, the cheapest and best factories in the world BY FAR. A Volcker moment  is coming and it will have ramifications for equities and real estate.

I'm not following why rising rates will make professional jobs disappear. Are you suggesting because the cost of capital is increasing that companies will begin laying off people?

Yeah, saying professional jobs disappearing due to rising rate doesn't make much sense. High tech companies are desperate in hiring right now. My group had been interviewing candidates and we're getting pretty desperate due to losing those candidates to Apple and Google.

The tech industry as we know it has never had to face a rising rate environment.  It's easy to raise capital for high risk ventures when money is cheap and getting cheaper all the time.  Looking back at the 1980's recession, capital-intensive industrial giants were hit very hard.  This time industrials are a less important part of the economy and tech is much more important.  As investors regain the ability to earn a reasonable return on less risky assets, a lot of capital is going to flee the tech sector and move back towards bread-and-butter historically safe investments.  The large well-established tech firms should do alright, but a lot of poorly run startups are going to get wiped out.
 
Liar Loan said:
The tech industry as we know it has never had to face a rising rate environment.  It's easy to raise capital for high risk ventures when money is cheap and getting cheaper all the time.

So 2013 through 2018 was not considered a rising rate environment? Average 30 year mortgages rose from 3.32% to 4.94%

In the same period, these tech stock prices:
Facebook - $28 to $137 (5x)
Amazon - $259 to $1575 (6x)
Apple - $18 to $37 (2x)
Netflix - $12 to $297 (25x)
Google - $352 to $1,046 (3x)
QQQ - $66 to $152 (2.3x)
 
OCtoSV said:
Martin - one key factor is jobs; many professional jobs will evaporate in a rising rate environment, and many purchases rely on 2 incomes. The Fed is not the BOJ and they will be forced to raise rates sooner rather than later given the natural inflation hitting us from the supply chains needing to exit China, the cheapest and best factories in the world BY FAR. A Volcker moment  is coming and it will have ramifications for equities and real estate.

No Volcker moment is coming, not even close.  There's way too much debt in the system so the Fed won't be able to raise rates very high because it could crush the economy...we'll probably see a 1-2% Fed funds rate at the next of the rising rate cycle.  Covid isn't going anywhere for several years if at all and you saw how the market took news today and last Friday, including yields dropping like a rock. There's been a fundamental shift in housing demand with WFH and millennials becoming home buyers.
 
USCTrojanCPA said:
There's been a fundamental shift in housing demand with WFH and millennials becoming home buyers.

This.

If I'm a high earner and they allow me to WFH, i am certainly going to buy a house where I want to live instead of having to rent or buy close to the office which could be much more expensive.

Why do you think those NorCal people are buying in Irvine?
 
Cares said:
Liar Loan said:
The tech industry as we know it has never had to face a rising rate environment.  It's easy to raise capital for high risk ventures when money is cheap and getting cheaper all the time.

So 2013 through 2018 was not considered a rising rate environment? Average 30 year mortgages rose from 3.32% to 4.94%

In the same period, these tech stock prices:
Facebook - $28 to $137 (5x)
Amazon - $259 to $1575 (6x)
Apple - $18 to $37 (2x)
Netflix - $12 to $297 (25x)
Google - $352 to $1,046 (3x)
QQQ - $66 to $152 (2.3x)

I don't think mortgage rates directly affect FAANG stocks.  If you look at 10 Yr Treasuries, they have been rangebound for the past 10 years - fluctuating between 1.4%-3.2% for that entire time.  There has been no sustained increasing rate environment.  Also, FAANG stocks have sustainable competitive advantages that will allow them to grow, but the rest of tech will be hit harder with the removal of easy money.
 
Regarding WFH.
My customer told me they were slated to go back to the office by now...but it's been postponed to APR....and there is a lot of grumbling from the workers that they will not return to the office once it's time.


They have been as productive WFH and it's almost 2 years now.


Corporate needs to rent a smaller office.
 
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