National Housing Market OutlookDemographics

Good News for Home Buyers and Home Builders: FHA and GSE Loan Limits Rise in 2024

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Chris Porter photo

Danielle Nguyen

Chris Porter

December 8, 2023
Couple buying a house and closing a deal with the real estate agent

The US government programs designed to boost homeownership just made buying a home more accessible.

Approximately 72% of home buyers use financing provided by the FHA, VA, Fannie Mae, or Freddie Mac—government agencies that require minimum or no down payment and offer friendlier borrowing terms than other mortgage programs:

  • FHA financing is now available on homes up to $498,257 everywhere and up to $1,149,825 in the most expensive markets. Previously, the limits were $472,030 and $1,089,300.

  • GSE (Fannie Mae and Freddie Mac) financing is now available on homes up to $766,550 everywhere and up to $1,149,825 in the most expensive markets. Previously, the limits were $726,200 and $1,089,000.

Many new homes are priced for mortgages just under the current limits. We expect many of these homes to increase in price now that favorable financing limits have increased.

Why bigger loans help

Here’s a refresher on FHA and GSE loans and who benefits from them:

  • FHA loans go primarily to entry-level buyers with low down payments and/or lower credit scores, many of whom will qualify for a higher balance mortgage in 2024 than they could have in 2023.

  • GSE loans go primarily to entry-level and move-up buyers with a higher credit score, who otherwise would have had to qualify for a jumbo loan.

The 2024 loan limit increases vary by MSA, ranging from no increase for select markets to a $63K loan limit increase. Several top markets have sizeable increases, and we expect these increased loan limits to positively impact next year’s new home sales (starting with home sales contracts now) and home closings.

Loan limits are indexed against home price appreciation from the prior year, which is why a few markets with no price appreciation (e.g., Austin) did not have any increase in loan limits. The government typically does not lower the limit when the market corrects. See the tables below for 2024 loan limits across the top housing markets we track.

Our Consulting teams have benefitted from a pickup in for-sale land-buying activity lately, driven partly by falling rates and the anticipation of higher loan limits. Publicly traded home builders and land bankers have become extremely active.

Our Research team is using this insight, additional data, and survey results to increase our single-family construction and sales volume forecasts for next year. Falling rates should also help the rental construction markets, although we have yet to see a pickup in activity there.

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About The Author

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Danielle Nguyen
Vice President of Research
Danielle manages, implements, and analyzes the housing market with a specific focus on for-sale and for-rent research. She is a research content creator who produces high-quality, insightful, and forward-looking housing research and a trusted resource (connector) for clients and those interested in JBREC’s research.
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Chris Porter
Senior Vice President, Chief Demographer
Chris brings clarity to JBREC’s clients on demographic trends and translates their impact on local housing markets. He also analyzes and compares local housing market metrics in JBREC’s Metro Analysis and Forecast and Regional Analysis and Forecast monthly reports.

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