“The surge in home prices during the pandemic could fuel the biggest dollar increase in the conforming loan limit for Fannie Mae and Freddie Mac in records dating to 1970.

An increase in the conforming loan limit means more homebuyers will be able to apply for conforming mortgages instead of “jumbo” loans, which are typically harder to qualify for and carry higher interest rates because they’re not backed by Fannie and Freddie.”

“The baseline conforming loan limit is tied to national average home prices. After the 2007-2009 housing crash and recession, it didn’t go up for a decade, remaining static at $417,000 until home prices clawed their way back to previous heights.

Last November, Fannie and Freddie’s federal regulator bumped up the 2021 baseline conforming loan limit for single-family homes by $37,850, to $548,250. The 7.4 percent increase was based on annual home price appreciation tracked by the Federal Housing Finance Agency’s House Price Index.”