The Government of the USA has increased its 2023 conforming loan limits to slightly over $1 million in some of the country’s highest-cost districts. Florida has not reached this threshold despite the record-high property prices in the current year.
This week, the new loan limits introduced by the national Government were published on the website of the Federal Housing Finance Agency (FHFA). The values for Miami-Dade, Broward, and Palm Beach Counties were raised from $647,200 to $726,200. The highest limit across the state was set for Monroe County: buyers of local properties can take a home loan of $874,000 next year compared to $710,700 in the current year.
$1.089 million limits were set for California, Wyoming, New York, New Jersey, Massachusetts, Pennsylvania, West Virginia, Virginia, Maryland, Alaska, Hawaii, Idaho, and Utah. They will come into effect in January 2023.
FHFA set the new limits upon comparing the median changes of selling prices between the third quarter of 2021 and the third quarter of 2021. Although the median value increased by 12.4% nationwide, one of the highest year-on-year surges (from 20% to almost 30%) was recorded in some parts of Florida. The Agency also studied the average borrowing costs, which were $485,000 in some districts of Miami, Fort Lauderdale, and Palm Beach.
This year, house prices in Miami-Dade have reached a historic high. The average house value peaked in June ($579,000) and dropped slightly to $575,000 afterwards. Wealthy Americans were migrating to Miami-Dade and other Florida counties during the pandemic, when people from all over the country and particularly from the northeast decided to leave their home states for a warmer winter, lower taxes, and laxer COVID-19 restrictions in Florida. This activity boosted the demand and housing prices.
Florida’s new limits are a blessing in disguise for the housing crisis in the southern part of the state, says Ken H. Johnson, Finance Professor at the Florida Atlantic University. This limit leaves much more wiggle space for some buyers without causing a sharp surge of prices on the sellers’ part. This may reduce prices and make homes more affordable.