Thanks to the bond-friendly environment, mortgage rates fell further this week. According to Freddie Mac, the rate on a 30-year fixed mortgage dropped to 6.49% from 6.58% the previous week. As a result, the monthly mortgage payment for a median-priced home dropped by $140 in the last three weeks.
Data shows that mortgage rates may have peaked. After surpassing the 7% threshold in the second week of November, rates are finally moving down as inflation is cooling. Rates are still more than double those of a year ago, but if inflation continues to slow down, rates may stabilize near 6%.
Meanwhile, the FHFA raised the new conforming loan limits for 2023 by 12%, reflecting the year's solid home price gains. This increase will allow buyers and homeowners in most areas across the country to get a conforming loan when they purchase a home – assuming a 10% down payment - up to $800,000 in 2023 versus the $720,000 limit in 2022. In the meantime, about 5% of homes currently available on the market are in the price range of $700,000 to $800,000, while nearly 4% of home sales fall within that same price range. Thus, many buyers could benefit from these higher loan limits in 2023.