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Moving to the coasts could be harder come October

Expiring GSE conforming loan limits could make it harder to move to expensive coastal cities.

Expiring GSE conforming loan limits could make it harder to move to expensive coastal cities.

The expiration of certain stimulus act provisions could make it harder to relocate to the coasts, according to a recently released National Association of Home Builders report.

In 2008, Congress voted to allow Fannie Mae and Freddie Mac to purchase and securitize larger loans than was previously permitted. Under these regulations, limits have been established at 125 percent of the median list price of homes in designated high-cost areas, with the national ceiling for conforming loans set at $729,750. But the law is set to expire in October, which means the national ceiling would fall to $625,500, and limits in high-cost areas would be set at 115 percent of median list price.

NAHB warns the lower limits for conforming loans will force buyers to consider private mortgages with higher downpayments and tighter credit requirements. This is likely to drive down demand and house prices in high-cost real estate markets. The report specifies many of these areas are coastal markets that are also very densely populated. According to NAHB calculations, it's possible nearly a third of all owner-occupied homes in America will be affected if the conforming loan limit decreases.

On June 27, real estate website House Hunt published a list of the 20 most expensive cities in 2011. All are in California or Florida.