In North Texas, we have been affected by housing inventories just like the rest of the country, only not as severe as many areas. When counseling our sellers as to setting price, we've found it very important to price in as close a proximity to loan limits as possible. What do I mean by that? Well, in North Texas, the current loan limit for FHA is $271,000.
Why is that important today? First off, FHA offers very low interest rates with minimum down payment(3.5%), and credit scores can generally be lower than that required for most conventional loan products today. In fact, we are seeing a 6X growth in the number of FHA loans this year versus last. So, the highest you can price a home that would require no more than the minimum down payment would be right at $280,800. Any prices higher than that are going to require more than the minimum down payment. The farther you get away from FHA loan limits, the smaller the potential pool of buyers. It has more impact than you think... And, oh by the way, the $8000 first time home buyer tax credit goes away November 30th!