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Home loan limits up as real estate supply, demand drives up prices

Posted at 7:22 AM, Dec 07, 2021

WACO, Texas — Real estate supply and demand are driving up prices.

"Be responsible. Don't live outside your means," Chris Allmay suggested.

The current limit for conventional home loans is $548,000 but come January 1, 2022, that number climbs to $647,000.

It is a pretty big jump as Allmay describes it. calls it a record 18% jump.

Allmay is the branch co-manager of Fairway Independent Mortgage Corporation in Woodway.

Allmay told 25 News, people who want to borrow between $550,000 to nearly $650,000 would have had a harder time getting approved.

"A year ago, it would have been more difficult. The guidelines were stricter," Allmay said. "They would have to have had maybe more cash in the bank maybe would've had to put a little more down."

He believes the hope is to relieve some pressure at the top, which could be good news for Central Texas buyers in a lower price range around $300,000, where supply can't keep up with demand.

"The person who benefits the most is the person who has the capacity to borrow a little bit more," Allmay said.

In Central Texas and in many other housing markets, that's what it takes for buyers to compete against multiple offers.

"Sellers are getting so many offers that they're really just looking at the conventional loan offers," Allmay said.

His advice, don't focus on interest rates or what you are pre-approved for.

Junk mail comes just about every day, full of offers.

"All just hooks to get people to fill out applications," Allmay said.

He recommends focusing on getting your finances in order, paying down debt, and improving your credit score.