In any event, if I were the seller of a property that I hoped to sell for $375,000, and the FHA loan limit suddenly went to $362,250, I would have a hard time turning down an offer in hand of $362,250.

If I were a buyer of that same property today, I’d have a hard time offering much more than the $362,250 for a $375,000 property. Similarly for properties priced slightly higher. For those properties significantly above $420,000, this should have little impact.

In any event, I don’t see where placing lower limits on some buyers will help boost the number of sales or the level of selling prices.

Since there are so many market forces, I am not sure how to measure the impact in the future.

JP – I don’t know if there will be a direct impact on prices, per se. The FHA loan limit could shrink the market of buyers in the $375,000 – $430,000 range, but I think bloated inventory levels will cause more pricing pressure across the board than FHA limits.