Last Updated on December 21, 2021 by Eric

The real estate market in Seneca and the surrounding lake areas have been hot for the last couple of years, and home values have increased substantially. As a result of these increases, the Federal Housing Finance Agency (FHFA) has announced its new loan limits, reflecting the massive increase in home values nationwide. The House Price Index determined the FHFA’s increase for the third quarter of 2021 compared to the third quarter of 2020. The national average price increase was an enormous 18.05% during that time.

How Do Loan Limits Work?

In 2008, the FHFA was created as part of the Housing and Economic Recovery Act, which was enacted to respond to the housing market crash. The FHFA is responsible for setting conforming loan limits based on the House Price Index. From there, counties determine their own loan limits, and this time around, all but four counties followed the FHFA’s increase.

Oconee County did follow the FHFA’s baseline increase to reflect the 21% increase in real estate prices that we saw this past year.

The New Loan Limits

The new conforming loan limits have increased significantly. These new limits far exceed the average home value in Seneca, which is just about $232,000. However, if you are looking for a lakefront property near Lake Keowee or Lake Hartwell, this increase may be necessary since values can be much higher.

The new loan limits are as follows:

• $647,200 for regular one-unit loans (increased from $548,250 in 2021)
• $970,800 for one-unit high-balance loans (increased from $822,375 in 2021)
• $1,243,050 for two-unit high-balance loans (increased from $1,053,000 in 2021)

Once the FHFA sets their loan limits, they cannot be reduced. So even if the housing market experiences a dip in the future, these limits are here to stay. If prices go up even more, we may see these limits increase, too.

What Does This Increase Mean For The Seneca Real Estate Market?

Increasing the loan limits will allow real estate values to increase more quickly than relying on cash buyers to lift the average home value.

Of course, homes will still need to be appraised to be approved for a loan. Still, having the opportunity to get a loan for a higher amount increases the number of people who can purchase more expensive homes.

The increase in buyers coupled with low-interest rates and low inventory means home values will probably increase – so if you have been thinking about buying a home, it is best to do so sooner rather than later.

If you’re ready to buy or sell a home, the agents at Bob Hill Realty are here to help. Give us a call to speak to one of our agents! We are experts in the Seneca real estate market and can help you get into one of South Carolina’s best retirement communities, a lakefront home, or wherever else you and your family want to live.

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