GSE Limit to Rise to $322,700

Fannie Mae and Freddie Mac will reach a little deeper into the mortgage market next year when they raise the ceiling on single-family home loans they can purchase or securitize to $322,700.The 7.33% increase from $300,700 this year isn't as great as expected. "Prices bounce around from month to month," said Tim Forsberg of the Federal Housing Finance Board. "I guess we got 'em on the downside." Increases in the conforming loan limit are based on the board's survey of housing costs from one October to the next in 31 major markets. The average this October was $235,700, compared with $219,600 a year ago. But just a month earlier, the change was even more dramatic, with prices rising 8% -- from $219,900 to $237,600 -- over the 12-month period. Nevertheless, the two government-sponsored enterprises say as many as 250,000 higher-end home buyers and owners will reap the rewards of somewhat lower interest rates starting Jan. 1. Currently, Fannie's and Freddie's combined loan purchases represent an estimated 64% of total industry production, according to the Quarterly Data Report, a MortgageWire affiliate. In addition, the Federal Housing Administration is expected to raise the limit on loans it can insure to $280,749 in high-cost markets and $154,896 is most other places.