The Office of Federal Housing Enterprise Oversight announced this morning that it will NOT increase the conforming loan limit in 2008. The conforming loan limit will remain at $417,000 for loans secured by single-unit homes and purchased by Freddie Mac and Fannie Mae. Higher limits apply to Hawaii, Guam, the Virgin Islands and Alaska.
The reason for no increase next year is due to the declining market. The government compares the decline in housing values from October of the previous year to October of this year. The average house price, according to the Monthly Interest Rate Survey, has declined 3.65% over the combined past two years.
I realize many agents (and buyers) were hoping for an increase in the conforming loan limit, especially agents who work in California. But it's not going to happen.
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