TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1488302
58 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT FHFA Details Q3 Home Price Increases "House prices were flat for the third quarter but continued to remain above levels from a year ago," said William Doerner, Ph.D., Supervisory Economist in FHFA's Division of Research and Statistics. R esults from the third quarter of 2022 are in and according to the Federal Housing Finance Agency's Home Price Index, home prices were up 12.4% between the third quarter of 2021 and the same period in 2022. House prices were up 0.1% com- pared to the second quarter of 2022. FHFA's seasonally adjusted monthly index for September was up 0.1% from August. "House prices were flat for the third quarter but continued to remain above levels from a year ago," said William Doerner, Ph.D., Supervisory Economist in FHFA's Division of Research and Statistics. "The rate of U.S. house price growth has substantially decelerated. This deceleration is widespread with about one-third of all states and metropolitan statistical areas registering annual growth below 10%." The top findings highlighted in the report by the FHFA include: • Nationally, the U.S. housing market has experienced positive annual appreciation each quar- ter since the start of 2012. • House prices rose in all 50 states and the District of Columbia between the third quarters of 2021 and 2022. The five areas with the highest FHA Raises 2023 Loan Limits in Response to Home Prices The maximum loan limits for FHA forward mortgages will rise in 3,222 U.S. counties next year, while in just 12 counties, loan limits will remain unchanged. T he Federal Housing Administration (FHA) has announced new loan limits for calendar year 2023 for its Single Family Title II forward and Home Equity Conversion Mortgage (HECM) in- surance programs. Loan limits for most of the country will increase in the coming year due to house price appreciation during the first half of 2022, which is factored into the calculations the FHA uses to determine the limits each year. "The loan limits announced today reflect steep increases in home prices throughout much of the country and will ensure continued access to FHA-insured mortgage financing despite those increases," Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said. The new forward mortgage loan limits are effective for FHA case numbers assigned on or after January 1, 2023: Note that mortgage limits for the special exception areas of Alaska, Hawaii, Guam, and the U.S. Virgin Islands are adjusted by the FHA to account for the high costs of construction in those areas. The maximum loan limits for FHA forward mortgages will rise in 3,222 counties, while in just 12 U.S. counties, FHA's loan limits will remain unchanged. By statute, the median home price for a Metropolitan Statistical Area (MSA) is based on the county within the MSA that has the highest median price. The HECM/reverse mortgage maximum claim amount will increase from $970,800 in calendar year 2022 to $1,089,300, effective for FHA case numbers assigned on or after January 1, 2023. This maximum claim amount applies to all areas, including the special exception areas of Alaska, Hawaii, Guam, and the U.S. Virgin Islands. The FHA is required by the National Housing Act (NHA), as amended by the Housing and Economic Recovery Act of 2008 (HERA), to set Single Family for- ward mortgage loan limits at 115% of area median house prices for a particular jurisdiction, subject to a specified floor and a ceiling. In accordance with the NHA, FHA calculates forward mortgage limits by MSA and county. The NHA requires FHA to establish its floor and ceiling loan limits based on the national conforming loan limit set by the Federal Housing Finance Agency (FHFA) for conventional mort- gages owned or guaranteed by the government-sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac. The national conforming loan limit for 2023 for a one-unit property is $726,200. FHA's 2023 minimum national loan limit floor of $472,030 for a one-unit prop- erty is set at 65% of the national conforming loan limit. This floor applies to those areas where 115% of the median home price is less than the floor limit. Any area where the loan limit exceeds this floor is considered a "High-Cost Area." In these High-Cost Areas, the FHA establishes varying loan limits above the floor based on the respective median home prices in each area. The NHA requires the FHA to set its maximum loan limit ceiling for high-cost areas at $1,089,300, which is 150% of the national conforming loan limit. Forward mortgage limits for the special exception areas of Alaska, Hawaii, Guam, and the U.S. Virgin Islands are adjusted further by FHA to account for the high costs of con- struction in those regions. Additionally, the FHA-insured HECM maximum claim amount is calculated at 150% of the Freddie Mac national conforming limit of $726,200. FHA's current HECM regulations do not allow the HECM limit to vary by MSA or county; instead, the single HECM limit applies to all HECMs regardless of where in the United States the property is located.