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In this era of decreased equity in homes, our buyers have less money to put down. Prices are now rising in our North Atlanta area and we are hopeful this will continue. Our average price increased in this area 10% last year. We are at $295k average price in Forsyth County and $395k in North Fulton County. Many of our young families are looking at homes in the $400-600k range to get the space they need. In face, most of our business is in this price range. What we see in many families is that they only have 10% to put down, plus they have to pay about 3% on average for closing costs. This means that they have to stay below $460k to have enough for downpayment and stay within a conforming limit. Lowering the conforming limit by 17k when prices are going up doesn’t make sense. You are further hurting the consumer buying power even though they are great candidates for the loan- good credit, solid jobs, just cash poor due to recent economic conditions or sale of previous home.

It would make more sense to look at average prices and note that they are going up and raise the conforming limit. I am just not seeing the rationale. I can assure you this will hurt sales at the higher price points, over $500k and you will see more people unable to sell their homes. We already have a glut of homes on the market over $600k and too little inventory under $500k.

Please keep this in mind as you look at conforming loan limits. We do not need even more people at the higher price points that are unable to sell, become foreclosures or short sales or are forced to decrease price and then compete with lower priced homes. There will be a trickle down affect on all homes, as there always is.

I see no reason why you wouldn’t increase conforming loan limits if we are already getting close to 417k as the average sales price in our area and other big cities have much higher average sales prices.

Best wishes in your decision making.