Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Mortgage Rates, December 2, 2021

Mortgage rates remained relatively flat this week, despite rising concerns of the omicron COVID variant. According to Freddie Mac, the 30-year fixed mortgage rate slightly rose to 3.11% from 3.10% the previous week. These low mortgage rates continue to offer favorable conditions to homebuyers and homeowners who want to refinance.

In the meantime, the Federal Housing Finance Agency (FHFA) just released the new conforming loan limits for 2022. Due to strong prices gains, the conforming loan limit will be $647,200, which is an increase of nearly $100,000 from 2021. In high-cost areas, the new limit is 150% higher than the national level. Specifically, in these areas, the conforming loan limit will be $970,800.

What does this mean for homebuyers and homeowners?

This limit increase will help many homebuyers to get a conforming loan, securing a low interest rate. Thus, in most of the areas across the country, homebuyers will be able to get a conforming loan when they purchase a home up to $720,000, assuming a 10% down payment. Respectively, in high-cost areas such as San Francisco and the District of Columbia, homebuyers can purchase a home up to $1,078,670 with a conforming loan. Moreover, this increase in conforming loan limits will also benefit many homeowners who will be able to refinance their jumbo loan to a conforming loan, securing a lower interest rate. If they have a current jumbo mortgage with a balance up to the new limits, they can potentially qualify for a better conforming loan rate. Although rates will likely rise in 2022, they will continue to be historically low. NAR forecasts the 30-year fixed mortgage rates to average 3.5% in 2022.