36% of California homeowners with mortgage are ‘equity rich’
By Ron Trujilloemail@example.com
More than one of every three homeowners in California was considered equity rich at the end of fourth-quarter 2016, a head-turning figure greatly helped by fast-rising home prices in the Bay Area and Southern California.
The aptly named Golden State boasts the third-highest percentage of equity rich homeowners in the nation at 36%, behind only Hawaii (37.8%) and Vermont (36.9%), according to a recent RealtyTrac report.
Homeowners are considered “equity rich” if they have 50% or more equity in their property – or owe less than 50% of their mortgage.
Three of the nation’s four most equity rich metropolitan regions are in California, including San Jose at 51.6% and San Francisco at 47.7%. Los Angeles finished in fourth place nationwide at 39.2%.
FHA raises lending limits
The Federal Housing Administration, which insures home loans by banks and other lenders, has increased its lending limits, allowing more homebuyers to qualify for the federal program.
FHA boosted the limit for high-cost areas – think all of the Bay Area – from $625,500 to $636,150. The new limit affects FHA-insured home loans after Jan. 1, 2017.
The new limits, prompted by higher home prices, will help more homeowners qualify for FHA-insured loans.
The new lending limits are higher than the January median-home price in some cities and lower in others, according to a recent California Association of Realtors report. For example, the new maximum is higher than the median-home price in Los Angeles, but far from the $1 million price in San Francisco, Marin and San Mateo counties.
Some new lending limits by city:
- Bakersfield: $275,665
- Los Angeles: $636,150
- Redding: $275,665
- Riverside: $379,500
- Sacramento: $488,750
- San Diego: $612,950
- Santa Barbara: $636,150
- Santa Rosa: $595,700
The FHA has a list of lending limits by metropolitan regions.