Due to rising home prices, the Federal Housing Finance Agency announced Tuesday that it would raise loan limits for mortgages backed by Fannie Mae and Freddie Mac.
In most of the country, the 2021 maximum conforming loan limit for single-family properties will be $548,250. That marks a 7.4% increase from last year’s limit of $510,400. The FHFA’s loan limits define the maximum amount that Fannie and Freddie can finance for a one-unit single-family home.
In more expensive markets, such as California and New York, the new limit will be $822,375, up from $765,000 in 2000.
“With home prices setting records in many U.S. markets, the National Association of REALTORS® is pleased to see the FHFA raise its national conforming loan limits for 2021,” NAR President Charlie Oppler said in a statement. “With an assurance that loan limits will align with home price growth, this decision will help ensure homeownership remains within reach for countless American families.”
U.S. home prices have continued to rise during the COVID-19 pandemic. The latest NAR report on existing-home sales showed that median home prices were up 15.5% in October compared to a year ago.