Fannie, Freddie to Back Mortgages Over $1M for First Time
The Real Deal New YorkNov 29, 2022
In a statement released on Tuesday, the US Federal Housing Finance Agency (FHFA) said the limit for federally-backed mortgages in high-cost areas in 2023 would rise to $1.089M, up from $970.8K in 2022. The limit for the rest of the country will increase from $647.2K to $726.2K.
The increase reflects the rapid rise in home prices, particularly in places like New York and California.
$1M doesn't get you nearly as much as it used to, even when compared to just a year ago. As a result, the latest FHFA limit increase won't help as many people as it would have in the past. First-time homebuyers in growing markets like California are dealing with costs of $1.25M or more, and the super-wealthy will still be the only ones able to afford homes easily.
The FHFA's latest limit increase will help not only prospective homebuyers qualify for mortgages but current homeowners, too. More existing homeowners will now be able to cash out refinance, meaning they'll gain access to extra cash in hand for expenses such as home improvements.