With loan caps on FHA loans set to drop from $729,750 to $625,500 effective September 30, 2011, some 5 million homes will be affected by this change based on the fact that the pool of buyers for those higher priced homes will become smaller due to their inability to come up with a higher downpayment. This will put continued downward pressure on pricing. This Wall Street Journal article explains further the concerns that will likely negatively affect the already weak housing market. Read article
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