The size of mortgages that are eligible for government backing will increase in 2017 for the first time since 2006, as home prices in the US have recovered to levels last seen before the 2008 financial crisis.
For most of the US, the 2017 loan limit for single unit properties will rise from $417,000 to $424,100. In some higher cost areas, higher loan limits will come into effect.
The 2008 housing and economic recovery act established the baseline limit of $417,000, adding that it could not rise until the average US home price returned to third quarter 2007 levels.
The data, coming on the same day as the Federal Reserve published minutes of its October meeting which pointed to a growing case for a rate hike – which the market fully discounts as happening on December 14 – will only fuel the case for a rate increase, the first in a year.
Story by ProactiveInvestors