Loan limits are now increasing to nearly $1 million dollars with Fannie Mae and Freddie Mac - here are my thoughts, and what this means for the real estate market of 2022 - Enjoy! Add me on Instagram: GPStephan
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Because the real estate market has skyrocketed to brand new highs, caused by a record shortage of inventory, supply chain delays, and low interest rates…Fannie Mae and Freddie Mac are expected to increase their baseline loan limits by 18%, or “to just under $1 million in high-cost markets,” in a way to reflect the current landscape of real estate.
As The WallStreetJournal reports: “The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government.”
On the one hand, this gives buyers more room to purchase a home in these current conditions…and given how quickly prices have been rising, the new loan limits would simply “BUMP UP” to match where the market is selling. Not to mention, these higher limits would no longer punish buyers who happen to live in a market where “starter homes” fetch $1 million dollars because Facebook took over…so, in a way - it could be fairly justified.
But, on the other hand...”some housing experts say the expected jump in loan limits raises questions about the appropriate role of the government in housing… and whether taxpayers should effectively backstop sky-high housing prices, when Fannie and Freddie’s market share is already rising.”
PERSONALLY…I’m under the belief that, once the labor and supply chain shortages begin to stabilze..more inventory will come on the market and prices will begin to cool down. As far as WHEN that is going to happen - the Federal Reserve thinks about 18-24 months…but, it’s anyone’s guess…and, the real estate market could remain high for quite some time.
There’s also the talk about 18% of home sales being sold to investors…which, could be a sign that people are worried about rising inflation and want to hedge their position with low interest rate real estate…but, it could also just as easily be a sign that investors are buying properties for the sole purpose of fixing them up, and then immediately re-selling them back to an owner-user in a highly competitive market… so, who knows to what extent investors are really buying properties.
Either way…larger loans could be seen as a temporary solution, but - at some point - the real issue needs to be addressed, which is the fact that more homes need to be built to satisfy demand.
In terms of what YOU can do about it…honestly, the best course of action is to simply wait until you find the right deal, only buy with the intention of holding for at least 7-10 years, lock in fixed rate 30 year mortgage…and, no matter what…smash the like button.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/
GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & SEE MY STOCK TRADES - USE CODE GRAHAM: http://www.public.com/graham
NEW BANKROLL COFFEE NOW FOR SALE: http://www.bankrollcoffee.com
DOWNLOAD MY NEW FINANCIAL APP: https://hungrybull.page.link/graham
THE NEW PODCAST: https://www.youtube.com/channel/UCMSYZVlQmyG8_2MkIKzg0kw
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=100OFF - $100 OFF WITH CODE 100OFF
Because the real estate market has skyrocketed to brand new highs, caused by a record shortage of inventory, supply chain delays, and low interest rates…Fannie Mae and Freddie Mac are expected to increase their baseline loan limits by 18%, or “to just under $1 million in high-cost markets,” in a way to reflect the current landscape of real estate.
As The WallStreetJournal reports: “The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government.”
On the one hand, this gives buyers more room to purchase a home in these current conditions…and given how quickly prices have been rising, the new loan limits would simply “BUMP UP” to match where the market is selling. Not to mention, these higher limits would no longer punish buyers who happen to live in a market where “starter homes” fetch $1 million dollars because Facebook took over…so, in a way - it could be fairly justified.
But, on the other hand...”some housing experts say the expected jump in loan limits raises questions about the appropriate role of the government in housing… and whether taxpayers should effectively backstop sky-high housing prices, when Fannie and Freddie’s market share is already rising.”
PERSONALLY…I’m under the belief that, once the labor and supply chain shortages begin to stabilze..more inventory will come on the market and prices will begin to cool down. As far as WHEN that is going to happen - the Federal Reserve thinks about 18-24 months…but, it’s anyone’s guess…and, the real estate market could remain high for quite some time.
There’s also the talk about 18% of home sales being sold to investors…which, could be a sign that people are worried about rising inflation and want to hedge their position with low interest rate real estate…but, it could also just as easily be a sign that investors are buying properties for the sole purpose of fixing them up, and then immediately re-selling them back to an owner-user in a highly competitive market… so, who knows to what extent investors are really buying properties.
Either way…larger loans could be seen as a temporary solution, but - at some point - the real issue needs to be addressed, which is the fact that more homes need to be built to satisfy demand.
In terms of what YOU can do about it…honestly, the best course of action is to simply wait until you find the right deal, only buy with the intention of holding for at least 7-10 years, lock in fixed rate 30 year mortgage…and, no matter what…smash the like button.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/
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Just kicking the can down the road again. Trying to make the economy grow by pumping more artificial money into it via larger loans to more people. Who the hell is sleeping at the wheel.
Much like College… Yay. Larger loans -> Higher tuition -> more administrators and less money for teachers. So fucked up.
Banks would love a 40 year loan and a higher mortgage. Becoming increasingly harder to buy a house cash
Graham, geico commercials were my favorite… until you have started yours :)) good work, man! keep it up!
As a noted economist stated so eloquently, "A house is a rapidly depreciating asset that empties your wallet every day it owns you." …. he's right.
Redmond, WA Housing Prices Crater 19% YOY As Seattle Price Meltdown Accelerates
isnt this how a crash happens? higher limits and people wont be able to afford it? or not a big enough to crash the market
2008 CRIS REMAKE WITH MORE FX & CGI. THERE WILL BE BLOOD. AND VAMPIRES, BUGS & MOSQUITOS ARE GETTING READY.
Best video ever, i haven’t laughed this hard since before covid times 🤣🤣🤣🤣 I’m gonna tell my kids those dudes were Fannie Mae and Freddie Mac 🤣🤣🤣🤣 💀
Wow, total disconnect from the real economics. In comparison the price/rate of non conforming loans are much higher rate and lower property evaluations. This is definitely not a capitalistic move by big government.
Dangerous when US Biden Admin is corrupt, bankrupt, and steal from Paul(pauper) to pay Sam (uncle), and enslave US with a collapsing currency, during an unhealthy crisis , economic meltdown of useless, jobless, homeless, worthles$, inflationary recession and depression. (Zil low).
Pressing the like button costs me a monthly fee for YT premium, but so worth it, not how does that affect what you get from me when I watch a video from you? Great vid!
Isn't this the same guy that was just saying home prices are about to go down? Smh
Great stuff. I started watching your videos last year as a beginner before giving stock market a trial. I was able to make $46,000 with a capital of $8,000. Please keep it up
And the maintenance fees for some coops and condos in some states can be upward of over $2,000/month on top of one's mortgage and other costs, so the cost of maintaining a home can be very expensive ……….
So you're saying that the government is encouraging risky home loans. This sounds familiar. I'm sure nothing bad will happen.
"Private companies probably will be more restricted in who they are loaning money too"
Lol. But in the end you got private banks that are loaning money. Put restrictions on the banks for God sake. If you will privatise Fannie and Freddie I can bet that in few years they will issue instruments similar to CTO or CDO or something else and you will end with much bigger problem.
Also tax the rich. They are making this market bad. I don't know how it looks in USA, but in Europe real estate funds and companies renting estates via Airbnb were responsible for the higher prices before 2021.
It's just like skyrocketing tuition prices fueled by government backed student loans. It's almost as if anytime the government gets involved everything becomes more expensive. Weird…
So you can get a home equity loan even though you don't have much income. They get cash to keep the economy.going, but they will run out.
Why the hell americans just build new houses like in other countries around the world?
Hire some constructors to build the house or better get into construction business yourself and make a fortune.
This is the very opportunity every constructor/builder looks for that people will pay for building their own house tahn renting or buying a shithole of a building.
Someone enlighten me why people don't hire constructors in america and live better than buying properties?
Have patience and hold off from buying homes. There are 98m Babyboomers (of our 325m pop) in the US, with 80% being home owners. That's 75m homes. I believe Babyboomers were born from 1949 – 1963 and as we age, homes will come available as these Americans age out. Plenty of home supply across ~5 to 25 years. We are in extreme asset bubbles that will pop soon as we enter a recession in early 2022. End the Fed, they are the criminals propping up the real estate/stock/bond market & inflation with huge monthly bond purchases. Remember Inflation = Taxation. The biggest wealth transfer in history at the peril of the poor and middleclass. Make everyone a renter in 2022!
Graham, The Fed will raise interest rates soon, and yet you did not even mention its impact on the housing market. I heard that raising interest rates will soften the market. And, naturally, I heard the other side of this argument ……………………………………. I keep getting more and more confused.
If labour is what you seek ya need to get rid of ye countries m*th and de*th issues
investors buying property because you will own nothing and be happy. welcome to the new world order courtesy of klaus schwab
Great video Graham. I'd love to hear your thoughts on how this will affect rent prices. If more people can buy, does that mean less people wanting the same apartment? What about the potential 40 year loan? Since mortgage payments would drop, will rental prices follow suit?