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Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.

This year we will be celebrating, or not celebrating, Thanksgiving like never before. As one of the most popular holidays in America, this time, the gatherings will be decreased, and the festivities will be diminished. I hope, however, that the message that this time-period brings does not get squandered in the midst. Whatever your religion, whatever your traditions – to me, this time of year has always been about gratitude and appreciation.

Coincidently, the news this week mirrored this sentiment impeccably. Earlier, the Case-Shiller Home Price Index, which tracks the changes in the value of residential Real Estate across the U.S., was reported for the month of September. Their National Index reported a 7.0% year-over-year gain in home appreciation for September, up from the 5.8% improvement in August. This is the most significant annual increase since September 2014. Just to put this into context, someone who purchased a home for $500,000 in September 2019 will now have an additional $35,000 of equity (value) in most areas. If you are in super hot real estate markets such as those who are likely reading this publication, the percentage gain in appreciation is even more astonishing.

On a similar note, the FHFA (Federal Housing Finance Agency) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts. This report is typically a narrower view of housing and often doesn’t show meaningful increases that parallels the Case-Shiller movement. According to the FHFA, the index increased by 1.7% in September, which was higher than expectations of 0.9%. Additionally, they reported that the year-over-year appreciation numbers increased by 1.1% to 9.1%. As I have been writing, demand continues to outweigh supply and shows no signs of softening locally.

In other news, the Consumer confidence index, which measures consumer attitudes based on the economy, was reported at 96.1 for November, below expectations of 98.0. However, last month’s report was revised higher from 100.9 to 101.4. In a similar vein, the November report might be readjusted next month. These figures show strength in the U.S. consumer and predict that the usual business activity during the holiday season will bring continued strength and stability to the economy. Consumers appreciate sales and discounts, and this year is expected to be yield the largest in history.

In breaking news, as a result of continuous appreciating home values, the Federal Housing Finance Agency (FHFA) announced an increase to the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2021. In most of the U.S., the 2021 maximum conforming loan limit for one-unit properties will be $548,250, an increase from $510,400 in 2020. The new ceiling loan limit for one-unit properties in most high-cost areas will be $822,375 — or 150 percent of $548,250. In English, this now means that loan amounts up to $548,250 will now get the best interest rates in the marketplace, a $37,850 increase.

I think it’s fair to say that 2020 didn’t turn out like anyone could have imagined. The personal, medical, and economic hardships endured by so many are heartbreaking and will take much time for recovery. Regardless of how this pandemic rattled your life, everyone was impacted. I wanted to take this opportunity to personally thank all those people in my life – both personally and professionally – who have been by my side this year. Your efforts, friendship, assistance, commitment, and support are genuinely appreciated. Happy Thanksgiving to all.

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