The FHFA on Tuesday announced that the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac will increase by $79,000 in 2023 in most of the United States.
The 2023 CLL value for one-unit properties will be $726,200, up from $647,200 in 2022. In higher-cost areas, in which 115% of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit, according to the FHFA.
The Housing and Economic Recovery Act requires that the baseline CLL for the Enterprises be adjusted each year to reflect the change in the average U.S. home price.
Also Tuesday, the FHFA published its third quarter 2022 FHFA House Price Index®, which includes statistics for the increase in the average U.S. home value over the past four quarters.
According to the nominal, seasonally adjusted, expanded-data house prices increased 12.21% on average between the third quarters of 2021 and 2022. Therefore, the baseline CLL in 2023 will increase by the same percentage, according to the FHFA.