2023 conforming loan limit to rise 12%, topping $1M in some areas

In 2023, Fannie Mae, Freddie Mac and the Federal Home Loan Banks will buy home loans as pricey as $726,200 in most areas and over a million dollars in high-cost locations, the Federal Housing Finance Agency announced. The baseline conforming loan limit's increase of 12% from this past year reflects the year-over-year change in home prices, not the more recent month-to-month slowdown in appreciation. In the high cost locations, where the median value is 115% of the baseline conforming amount for one-unit properties — the 2023 limit of $1,089,300 is 150% of the baseline $726,200. A $1 million conforming loan limit for high-cost areas strikes many in the mortgage business "as quite high — so it would be reasonable for FHFA to look at policies surrounding high cost loans and whether the GSEs are doing too much in this million dollar range," a statement from the Community Home Lenders of America said.?

READ MORE: 2023 conforming loan limit to rise 12%, topping $1M in some areas

Lenders share their game plans for a difficult stretch

Banks, lenders, servicers, brokers and vendors are laying off staffers in droves and enacting other massive cost-cutting measures in response to mortgage volumes as of late October down 68% from the same time last year. Rapid rate hikes have also dampened demand for homes, which prices are starting to slow from record highs reached during the summer. Experts acknowledge the pain won't subside soon. "I think there's still lenders out there that, unfortunately, are using hope as a strategy and having to come to terms with the reality that we're in and likely will be in for some time," said Phil Shoemaker, president of originations at Homepoint. Lenders are promoting products specifically structured to ease the burden of volatile rates and still elevated home prices on borrowers. Mortgage executives, including some whose firms undertook layoffs this year, spoke to National Mortgage News about their approach in capping off a difficult year.

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Home prices drop for third straight month as U.S. market cools

The U.S. housing market pulled back even more in September, with prices slipping 1.2% from a month earlier. It was the third straight decline for the seasonally adjusted measure of prices in 20 large U.S. cities, according to the S&P CoreLogic Case-Shiller index. The housing market suddenly started to cool this year, driven in part by higher borrowing costs as the Federal Reserve hiked its benchmark rate to tamp down inflation. Although prices are rising year-over-year, they are slowing fast. A nationwide gauge increased 10.6% in September from a year earlier, down from a nearly 13% gain in August.

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