For the first time since the housing crisis, the Federal Housing Finance Agency (FHFA) has agreed to up the maximum conforming loan limits for mortgages backed byÂ Fannie MaeÂ andÂ Freddie Mac.
For much of the country, the $417,0000 Fannie Mae and Freddie Mac loan limit has not changed in ten years.
InÂ 2017, the limit increases to $424,100 for single-family homes. The limit has remained stagnant because no increase could legally be approved unless housing prices recovered to pre-crisisÂ levels.Click to see today's rates (Jan 16th, 2017)
Small Increase Reason For Big Celebration
And that's the real reason this increase in conforming loan limits is a Big Deal.
FHFA analysts have saidÂ that until now, the average U.S. housingÂ value remained stuck. No matter what real estate agents claimed, the market was not doing a happy dance, and overall prices did not beat thoseÂ of third quarter 2007 -- the "official" pre-implosion price level.
But as of today, theÂ Home Price Index for the third quarter of 2016 shows clearly thatÂ average home prices have blown through those of Q3Â 2007, and that conforming loan limits can be increased.Click to see today's rates (Jan 16th, 2017)
WhileÂ the conforming loan limits for much of the country will increase from $417,000 to $424,100, more expensive places get an increase, too.
Source: Freddie Mac
Limits for so-calledÂ â€śhigh-cost areas,â€ť where 115 percent of the local median home value exceeds the base loan limit, will also increase where merited.
The new limit, which applies in areas with the most high-end markets, will be $636,150 instead of $625,500.
Jumbo Homeowners Benefit Too
Homeowners with so-called "jumbo" mortgages may be soon able to refinance to lower mortgage rates, even though today's conforming rates are higher than they were prior to the 2016 election.
That's because loan amounts that previously fell into the (usually) more expensive non-conforming range might now be considered conforming -- acceptable for purchase by government-sponsored enterprises Fannie Mae and Freddie Mac.
William Brown, the president of the National Association of Realtors, told HousingWire that this is long overdue.
â€śTodayâ€™s conforming loan limit increase is a much-needed recognition of rising home prices in high-cost markets, and a help to first-time and lower-income borrowers looking to utilize an FHA mortgage.
Credit remains tight, but this decision will help more qualified buyers address the hurdles and high costs standing between them and the dream of homeownership.â€ť
What Are Today's Mortgage Rates?
Whether you're refinancing a jumbo home loan in 2017 or looking to buy a new home today, your mortgage rate depends on your property location as well as other factors. Check with a lender now to see what's available to you.Click to see today's rates (Jan 16th, 2017)