Decoding the 2024 Conforming Loan Limit: What Homebuyers Need to Know

In the fast-evolving realm of real estate, staying abreast of key financial parameters is crucial for prospective homebuyers. One such pivotal metric is the conforming loan limit, a figure that significantly influences mortgage dynamics. The 2024 conforming loan limit takes center stage, impacting homebuyers in ways that necessitate a closer look, it’s increase has also increased your purchasing power when your lender is assessing your situation against the 4 C’s of lending.

Why does the 2024 conforming loan limit matter?

The conforming loan limit is the maximum dollar amount of a mortgage that Fannie Mae or Freddie Mac will guarantee. In accordance with the Housing and Economic Recovery Act, the limit is adjusted every year to reflect changes in the average price of a home in the U.S.

Basically, this means you can purchase a home with a loan amount up to this limit and it will still be considered a Conventional Loan and you won’t need what’s considered a Jumbo Loan, which can typically come with higher rates, etc. So when you go to get your mortgage pre-approval your upper limit on what you can borrow won’t be restricted as much in 2024 as it was in 2023.

How often does it change?

The loan limit is reviewed annually, but it doesn’t necessarily change every year. There are times in the past when it has remained the same for many years in a row. One such notable period occurred during the economic downturn of the late 2000s.

Why does it change, and what drives it?

The adjustment to the conforming loan limit is a meticulous process, occurring on a per-county basis. In most counties, the limit receives a bump equal to the average annual percentage increase of national home prices. This ensures that the limit mirrors the dynamic nature of the real estate market, adapting to the ever-shifting landscape.

What is 2024’s conforming loan limit compared to 2023’s?

To put the numbers into perspective, the 2024 conforming loan limit stands at $766,550, a notable increase from the previous year’s $726,200.

If you want to look at other County’s Maximum Loan Limits, here is Fannie Mae’s list of the 2024 conforming loan limits for all counties and county-equivalent areas in the U.S, there is also a map version.

Talk with a Mortgage Expert!

Ready to explore how the 2024 conforming loan limit affects your homebuying journey? Contact us today for expert guidance. Your property journey begins with confidence, backed by the local expertise of Morgan Financial. Call 321-757-7530