The Commercial Real Estate Alpha Site

via Titan

The ceiling for government backing on mortgages on single-family homes in the highest-cost areas will increase to nearly $1.15 million in 2024, according to an announcement on Tuesday. That limit, the maximum for a loan to be bought by Fannie Mae and Freddie Mac, is up from about $1.09 million this year. For the rest of the country, the limit for loans to be purchased by the mortgage giants will climb to $766,550 from $726,200 this year.

The updates are likely a result of the current reality in real estate: home prices rose to a new record in September due to the shortage of homes for sale. Although Fannie Mae and Freddie Mac don’t issue mortgages, they buy them from lenders, bundle them into securities and guarantee investors that they will be paid. The increase in loan value should spur lending activity at the top of the market following a year of dramatic price increases.