Click To See Today's Rates

Posted 11/28/2016

Google+
LinkedIn
Reddit

Housing Crisis Definitely Over: Conforming Loan Limits Rise For First Time Since 2006

2017 loan limits

Finally, It's Really Time To Buy

For those who have been on the sidelines waiting for markets to shake off the Great Recession, this might be the sign they need.

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 by Fannie Mae and Freddie Mac.

For much of the country, the $417,0000 Fannie Mae and Freddie Mac loan limit has not changed in ten years.

In 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-crisis levels.

Click to see today's rates (Apr 30th, 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 said that until now, the average U.S. housing value remained stuck. No matter what real estate agents claimed, the market was not doing a happy dance, and overall prices did not beat those of third quarter 2007 -- the "official" pre-implosion price level.

But as of today, the Home Price Index for the third quarter of 2016 shows clearly that average home prices have blown through those of Q3 2007, and that conforming loan limits can be increased.

Click to see today's rates (Apr 30th, 2017)

Going Higher

While the conforming loan limits for much of the country will increase from $417,000 to $424,100, more expensive places get an increase, too.

fannie mae freddie mac 2017 loan limits

Source: Freddie Mac

Limits for so-called “high-cost areas,” 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.

“Today’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.”

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 (Apr 30th, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

3 Testimonials

Deborah C. Television Crewer

The Mortgage Reports is part of my morning routine. As I read, I learn more, and have come to understand the mortgage industry. I can't thank you enough!

Martha D. Visual Artist

The Mortgage Reports has given me lots of valuable information, and reliable information, too!

Mohammed Y. Retired

The Mortgage Reports is informative and I read it daily. I am grateful for the knowledge I have gained.

2017 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)