FHA Loan Limits Back on the Rise
Positive news on the existing home sales front with a 1.4% increase last month, which notably beat expectations. Add that to reports that construction rose to the highest level in a year, which may point toward at least some support within the housing market.
The President signed a bill last week that would increase FHA loan limits in certain higher cost areas. This increase would bring us back to the limits that had been suspended just a couple months back. Information around when borrowers can apply with these new limits should be released in the coming week or so. Certain areas across the country could definitely benefit from these changes.
With Thanksgiving this week, we haven’t seen much volatility in mortgage rates to speak of. Most attention this week is on the U.S. budget deficit and the results from the bi-partisan Super Committee. Keep a close eye on any news in this arena as continued gridlock could cause investor concern over the safety and stability of U.S. debt. If concerns rise, or rating agencies issue a warning on U.S. debt ratings, mortgage and Treasury rates could be negatively impacted.
Today, revised third quarter GDP did miss expectations, coming in at a modest 2% growth instead of 2.5% expected. Normally, this would cause rates to improve, but some investors continue to remain on the sidelines with the short week, and as more unfolds around the U.S. budget deficit.