Corcoran Group founder Barbara Corcoran argued during an appearance on “Kabuto: Coast to Coast” that a significant drop in mortgage rates would be “tremendous” for the market.
As home prices continue to soar in the U.S., the Federal Housing Finance Agency (FHFA) announced Tuesday that it will increase the loan limits for mortgages purchased by Freddie Mac and Fannie Mae by 5.2% in 2025.
The new conforming loan limit (CLL) for a one-unit home next year will be $806,500, an increase of nearly $40,000 from the 2024 base limit.
The FHFA announced that it will increase the loan limit for mortgages purchased by Fannie Mae and Freddie Mac by 5.2% in 2025. (Justin Sullivan/Getty Images/Getty Images)
However, in high-cost areas of the country where 115% of the median home value exceeds the base loan limit, the loan limit is 150% higher. Therefore, the loan limit for single-family homes in these areas would be $1,209,750, or 150 percent of $806,500, FHFA said.
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FHFA annually adjusts its loan limits to government-backed corporations Freddie and Fannie to reflect changes in average home prices, which rose 5.21% from the third quarter of 2023 to the same quarter of this year.
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In recent years, home prices in the United States have risen along with mortgage interest rates, causing a persistent housing price crisis.
Freddie Mac's latest Primary Mortgage Market Study, released last Thursday, found that the benchmark average interest rate was 30 year fixed mortgage It rose to 6.84% from 6.78% last week. A year ago, the average interest rate on a 30-year loan was 7.29%.
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Also on Tuesday, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported that home prices hit their 16th consecutive record high in September and are now 51% higher than they were at the start of the pandemic. did.
Information that U.S. home prices have hit record highs for 16 consecutive months (Liu Guanguan/China News Service/VCG via Getty Images / Getty Images)
Thelma Hepp, Chief Economist at CoreLogic, said: “The combination of continued rises in mortgage rates and rising prices means that when adjusted for inflation, the typical mortgage payment, which includes only principal and interest, is now “This is 82% higher than before the pandemic,” he said, noting that this number has not changed. It also includes increases in property taxes and insurance premiums.
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“As a result, it's not hard to see why the housing market is depressed,” Hepp added.
