Vast Majority of Houston Listings Below Conforming Loan Limits

by Peter Thomas Ricci

With talk in the air about overhauling Fannie Mae and Freddie Mac, how much sway does conforming loan limits have on our market?

Fannie Mae and Freddie Mac, the massive government-sponsored entities that are responsible for the vast majority of residential mortgages in today’s housing market, have been back in the news the last couple of weeks, and the topic has been that of reform – specifically, whether the government will maintain its long-standing promise to overhaul the entities and reform the mortgage marketplace.

Interestingly, though, a major part of Fannie and Freddie’s housing policies – the conforming loan limits that stipulate how much a consumer can borrow before entering jumbo loan territory – have not been a part of the reform discussion, and Mel Watt, the new head of the FHFA, has indicted that the limits will not decline in the near future.

So with that in mind, we took a look at some interesting new data from Trulia, which looked at what percentage of homes in a metro area’s housing market were above the area’s conforming loan limits. Should we be shouting from the rooftops for conforming loan limit reform? See the graph below to find out:

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