The surge in home prices means more than just higher priced homes it also means higher loan limits. Matt Carter at Imam believes this could fuel the biggest dollar increase in the conforming loan limit for Fannie Mae and Freddie Mac in records dating back to 1970…(Imam)
Why the rapid rise? The baseline conforming loan limit is tied to national average home prices. The latest FHFA HPI report showed 19.2% year-over-year appreciation. The current loan limit is $548,250 dollars. A 19.2% increase in that limit would be a $105,264 dollar increase.
When will this happen? While the Fannie and Freddie conforming loan limit doesn’t officially increase until Jan 1. The announcement is typically made in November. However, moves are already being made. HousingWire reported last week that PennyMac was upping its conforming loan limits by almost 14% and United Wholesale Mortgage is lifting its cap to $625,000…(HousingWire)
Record rise. If the conforming limit jumps to 625,000 that would be an increase of $76,750, the largest dollar increase on record. However, the 13.9% increase would fall short of the record 15.9% jump seen in 2006.
The median home price in the West is $507,000. When one region of the country has a median home price that is single digit growth away from hitting jumbo status it is probably time to take that conforming limit to the moon…