The Federal Housing Finance Agency is expected to reduce conforming loan limits on mortgages guaranteed by Fannie Mae and Freddie Mac this October. The hopeful anticipation is that demand driven by buyers looking to beat the deadline this summer will also drive up prices, thereby reducing recent dips in home values. But the rush may have less of an effect than thought, according to some analysts, and likely won’t last. The limits were originally raised in February 2008 as part of the economic stimulus, allowing the government-sponsored enterprises to guarantee more loans and more of the market at a time when private capital had all but vanished. Home prices hit a new low in the first quarter of 2011, falling 4.2% on the S&P/Case-Shiller index to levels not seen since 2002. A variety of reasons were given, including a glutton of distressed properties on the market, tighter lending requirements and an uncertain regulatory environment continues to keep demand at bay. Anthony Sanders, a professor of real estate finance at George Mason University said the scramble to get ahead of the conforming loan limit cuts – which would drive up costs for loans higher than the new limits – could push prices back up. “But that will be a short-lived blip, much like the Administration’s tax credit,” Sanders said in a blog post this week. Alex Villacorta, the senior statistician at data analytics firm Clear Capital, which called the double-dip two months before S&P/Case-Shiller, took a look a closer look at the data and found that lowering the conforming loan limits may not have such a drastic boost on prices. Villacorta pointed to Marin, Calif. specifically. There, the conforming loan limit will likely be cut to $625,500 from $729,750, which equates to a 14% drop. Since February 2008, when the new loan limits were set, Marin home prices for this upper-tier pricing segment have already dropped 25% as of the end of the first quarter. “I think prices will rise for homes between the old and new limits,” Villacorta said. “In that range it certainly could happen. But, really, to get a better gauge is to see how many buyers are really in this segment. In that range, it’s a very small percentage.” In Marin and nearby San Francisco counties, 25% of the transactions there came above the current conforming loan limit, which is on the high side. Villacorta said of the 250 markets he looked at, an overwhelming majority of the activity was already occurring beneath the limits, and therefore demand may not climb as fervently as the homebuyer tax credit incentive showed. For these higher-end markets such as Marin, San Francisco and New York, prices might actually fall off come October as the buyer pool in these areas drop off without the government guarantee on higher-valued loans. Still, Villacorta said like the current volatility, there will be many variables to blame. “You would be hard pressed to base another drop in prices on any decrease in the buyer pool or the conforming loan limits alone,” Villacorta said. “There’s already a significant amount of factors causing the drop.” Write to Jon Prior. Follow him on Twitter @JonAPrior.