Conventional loan limits for the Seattle metro area might go up in 2019, due to significant home-price gains that have occurred over the last year.
Currently, the conforming loan limit for Seattle (and all of King County) is $592,250. But federal housing officials might increase it in 2019 in response to rising home values.
Will Seattle See Higher Loan Limits in 2019?
Home prices across the Seattle metro area have increased steadily over the past few years. As a result, the size of the “typical” mortgage loan in the area has also gone up.
According to the latest data for October 2018, the median home value for King County is now north of $600,000. And it’s even higher within Seattle.
Rising house prices in and around Seattle could lead to an increase in the conforming loan limits for the area.
Loan limits are established by federal housing agencies and are largely based on the median home values within each county. And when those house prices rise considerably over the course of a year, housing officials often increase the loan limits to keep up.
That’s something we’ve seen in Seattle over the last couple of years, and it could happen again as we move into 2019.
Consider the real estate market “evidence”:
- The median home value for King County, Washington was $632,000 in October 2018, according to Zillow. The median price within the city of Seattle was $752,400. The 2018 conforming loan limit for the county and metro area is $592,250; that’s lower than both of the median home values mentioned earlier.
- In Napa County, California (by way of comparison), the median home value was $652,800 as of October 2018. That’s lower than Seattle. But the conforming loan limit in Napa County is currently set much higher at $679,650.
Rising Home Values Might Justify an Increase
In King County — and within the Seattle metro area in particular — there’s currently a big “gap” between home values and loan limits. Those limits are currently set well below average and median house prices for this part of the state. Real estate values in the Seattle area seem to warrant high conforming loan limits for 2019.
Based on all of these trends, there’s a better-than-average chance that federal housing officials will increase these limits as we move into 2019. We’ll know more some time in December. That’s typically when they make their announcements for the following calendar year.
Going ‘Jumbo’ With Your Mortgage Financing
As mentioned earlier, it’s possible to borrow more than the conforming loan limit for a particular county. This is referred to as a jumbo mortgage.
As of 2018, a conventional home loan in the Seattle area that exceeds the $592,250 limit is considered to be jumbo. And with house values rising the way they are, there are likely more borrowers seeking this level of financing today.