Conforming Loan Limits to Rise to $832,750 in 2024
WASHINGTON, D.C. – The federal housing Finance Agency (FHFA) announced today that conforming loan limits for one-unit properties will increase to $832,750 on January 1, 2024. This represents a $26,250 increase from the 2023 limit of $806,500 - a 3.26% jump.
The increase comes after several lenders, including united Wholesale Mortgage (UWM), Rate, and Cross Country Mortgage, preemptively raised their conforming loan ceilings to $819,000 in anticipation of the FHFA’s announcement. Those estimates now appear to have been slightly conservative.
By law,conforming loan limits are determined annually based on changes in the average U.S. home price.The FHFA utilizes the House Price Index reported by the Federal housing Finance Board, comparing October-to-October figures to adjust the limits. This methodology ensures the limits reflect the fluctuating housing market.
According to the FHFA, average home prices rose 3.26% between the third quarter of this year and the same period last year, driving the overall increase in conforming loan limits. The new ceiling will be in affect for all but 32 U.S. counties and their equivalents.
For high-cost areas, the new loan limit will be $1,249,125, calculated as 150% of the baseline $832,750 limit. Properties located in Alaska, Hawaii, guam, and the U.S. Virgin Islands will have even higher limits, with a baseline of $1,249,125 and a ceiling of $1,873,675.
The FHFA has not yet released information regarding the conforming loan limits for two-, three-, and four-family properties.
These changes impact the availability of mortgages that can be purchased by Fannie Mae and Freddie Mac, influencing the broader housing market and affordability for homebuyers.
