Numbers & geography
FHFA lifted the baseline conforming limit to $806 500 (+5.2 %). High‑cost areas jump to $1 209 750. FHFA.gov
HUD mirrored the move: FHA floor $524 225; ceiling $1 209 750. HUD
Who wins?
- Upper‑middle buyers in pricey metros now avoid jumbos (higher rates, tighter DTI). A $900 k condo in Queens can be financed with 5 % down instead of 10 % jumbo minimum.
- Sellers in the $750 k–$850 k band gain a larger buyer pool. Redfin saw 12 % more views on listings in that range the week after FHFA’s announcement.
Does it stoke price inflation?
Bay Area MLS median popped 3 % after last year’s hike. Economists debate causality: higher limits expand credit if buyers qualify, but inventory shortage is the bigger lever.
Jumbo vs. conforming cost spread
| Product (30‑yr fixed) | Rate | Points |
|---|---|---|
| Conforming ($750–$806k) | 6.50 % | 0.7 |
| Jumbo ($806k–$1 m) | 6.62 % | 0.6 |
Spread only 12 bps today; in 2020 it was 47 bps. Lesson: compare quotes—jumbo might still win if fees lower.
PMI changes
Private mortgage insurers set lower “mix and match” factors on new high‑balance conforming loans; borrowers with 10 % down could pay 0.23 % vs. 0.31 % old grid—saving $55/month on $800 k loan.
Refi & cash‑out angle
Hundreds of 2022 borrowers with $770 k balances can now refinance into conforming, cutting at least 0.125 % off rate and avoiding jumbo underwriting hoops.
Expect modest lift in high‑cost‑area sales volume Q3–Q4. If the Fed cuts twice by year‑end, watch a mini‑refi boom among 2022‑23 jumbo borrowers now eligible for conforming programs.
