Source: Barron’s —
In another sign of the pandemic’s rapid home price appreciation, the government today said it will back mortgages up to about $1.1 million in high-cost areas.
The 2023 value limit for most conforming mortgages for one-unit properties will be $726,200, the Federal Housing Finance Agency said Tuesday. The new limit represents an increase of nearly $80,000 from 2022’s limit.
In particularly expensive areas of the country, where 115% of the median home value exceeds the conforming loan baseline, the conforming loan limit will increase as high as $1,089,300. A map compiled by the FHFA shows that areas with the maximum conforming loan limit include some in the Mountain West region, California, the Washington, D.C. metropolitan area, and the greater New York City metropolitan area.
As home prices have risen, the new limits “can help more buyers to purchase a home with a conforming loan,” says Nadia Evangelou, the National Association of Realtors’ senior economist and director of real estate research. Assuming a 10% down payment, buyers in much of the country purchasing homes at prices up to about $800,000 will be eligible for a conforming loan, Evangelou adds.