Connecticut’s Gold Coast is losing its High-Cost Housing Designation
- Fairfield County in Connecticut is a trendy NYC suburb that is well-known for its hedge funds, mansions and beachfront properties.
- The government removed it from a “high-cost area” list that allows homebuyers to get larger mortgages.
- Jonathan Miller, a housing expert who lives in the area, was shocked at the designation change.
US home prices have soared over the past year with the notable exception of one of the nation’s most exclusive addresses — at least, according to one government calculation.
According to the Federal Housing Finance Agency, Fairfield County, Connecticut is New York City’s most expensive suburban enclave. There were barely any home-price increases from September to September. The county’s housing market is so far behind that of the rest, it’s losing the government’s “high cost area” designation. This allows local buyers to get larger mortgages that would be required to buy a typical home.
This is particularly surprising considering that the county is home towns like Darien, Westport and Greenwich, which are the capitals of hedge funds around the world. Steven Cohen,A billionaire from a hedge fund and the owner the New York Mets, he lives there. as do celebritiesShonda Rhimes, Emmy-winning producer for “Grey’s Anatomy,” Bridgerton” and “Inventing Anne,” is one example. The county’s median household incomeTops at $101,194 the overall median income in the US — $70,784 — by a large margin.
Jonathan Miller, a housing expert who wrote the “Elliman Report” covering Fairfield County, along with two dozen other top real-estate markets in seven states, stated that he was “really taken aback” when he found out the county was losing the high cost designation.
FHFA is the result of the rapid price rise in this year’s country
The change was made in FHFA’s annual examination The law regulates the amount of mortgages that are eligible for purchase by Fannie Mac and Freddie Mac. These government-sponsored enterprises exist to encourage homeownership and affordable rental homes.
The government grants these companies the right to purchase loans in high-cost regions. This is because these areas are more expensive than the rest of the country. Fannie Mae/Freddie Mac “Conforming” loans are eligible for purchase because they have a buyer pre-arranged for the debt.
FHFA states that high-cost areas include those where 115% or more of the median home price exceeds most of the base conforming-loan limit.
Like most places this year through September, Fairfield County — which is situated along the Long Island Sound about 50 miles north of New York City and sometimes known as the Gold Coast — saw rising home prices. According to FHFA, the median sale price rose to $615,000, an increase of $605,000.
The 1.65% increase was so minor that 115% of the Median is $707,250. This is below the FHFA’s 2023 base conforming loan limit of $726,000. In the same time frame, national home prices rose by 12.2%.
Other data supports a higher local-home price appreciation. Data from Douglas EllimanFairfield County’s median sales price increased by 8.2% over the previous year through September.
It may be harder for homebuyers next year to secure a large mortgage.
Analysts at FHFA believe that losing a high-cost region is not unusual. Fairfield was the only US county to be affected by this change. This could make it difficult for locals to get mortgages for higher-priced homes.
According to FHFA, the prices rose so much in other areas like California and Washington, DC, that the conforming-loan limit for those high-cost regions was set at $250,000 could climb to $1.06 million in 2023 — breaking the $1 million mark for the first time — from $970,800 in 2022.
Fairfield County has been declared a low-cost area. This means that borrowers will be able to borrow up to the base conforming-loan amount in 2023, if they don’t want to take out any other type of loan (or “jumbo”) from a bank. The county’s limit was $970,000 in 2022 for high-cost status.
Miller stated that although the change may seem perplexing at first glance, his data shows that Miller’s data shows that the county had its third-highest average sale price in history.
Miller stated that Fairfield County was one of the most robustly performing areas in the New York City metropolitan area.
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