What's happened
Mortgage rates in the U.S. declined slightly this week, with the 30-year rate at 6.23%. Meanwhile, the FHFA announced a 3.3% increase in the conforming loan limit for 2026, raising it to $832,750 in most areas, with higher limits in expensive markets like Los Angeles and New York.
What's behind the headline?
The slight decline in mortgage rates signals cautious optimism among lenders and investors, likely driven by expectations of further Federal Reserve rate cuts in December. However, the impact on home affordability remains limited, as high prices and economic uncertainty continue to suppress sales. The increase in conforming loan limits aims to support the housing market by enabling larger loans, especially in high-cost areas, but the overall market remains subdued. This combination of easing rates and higher loan limits suggests a strategic attempt to stimulate home buying without risking inflation or financial instability. Buyers in expensive markets will benefit most, but the broader market's sluggishness indicates that affordability and economic confidence are still significant hurdles.
What the papers say
AP News reports that mortgage rates have fallen slightly, with the 30-year fixed rate at 6.23%, down from last week, and bond yields also declining. The article notes that mortgage rates are influenced by the 10-year Treasury yield, which was at 4.01%. Meanwhile, both AP and The Independent detail the FHFA's decision to raise the conforming loan limit to $832,750 for most of the U.S., a 3.3% increase from 2025, with higher limits in high-cost areas like Los Angeles and New York. The articles highlight that despite rate declines, housing sales remain sluggish, with sales of previously occupied homes staying below pre-pandemic levels, reflecting ongoing affordability challenges and economic uncertainty. The Independent emphasizes that the housing market has been in a slump since 2022, with sales flat this year despite falling mortgage rates, while AP notes that the Federal Reserve's rate cuts have yet to translate into significant mortgage rate reductions, illustrating the complex relationship between short-term rates and home loan costs.
How we got here
Mortgage rates have been fluctuating since summer, influenced by Federal Reserve interest rate decisions and bond market expectations. The housing market has been sluggish since 2022, with sales remaining below pre-pandemic levels. The FHFA adjusts loan limits annually based on home value trends, reflecting a slow but steady rise in U.S. home prices.
Go deeper
Common question
-
Why Did US Mortgage Rates Fall After Weeks of Increases?
Mortgage rates in the US have recently declined after a period of steady rises, raising questions about what this means for homebuyers and the housing market. Many are wondering if this trend will continue or if rates will climb again soon. Below, we explore the reasons behind the recent drop, its impact on the housing market, and what to expect moving forward.
-
What Are the Latest UK Financial and Market Reforms in 2025-2026?
UK markets are undergoing significant changes this year, with reforms aimed at boosting transparency, supporting private investments, and adapting to new technologies like AI. Investors and industry watchers are asking: what exactly is changing, and how will it impact the economy? Below, we explore the key reforms and what they mean for the future of UK finance.
More on these topics
-
The Federal Home Loan Mortgage Corporation, known as Freddie Mac, is a public government-sponsored enterprise, headquartered in Tysons Corner, Virginia.
-
The Federal Housing Finance Agency (FHFA) is an independent federal agency in the United States created as the successor regulatory agency of the Federal Housing Finance Board (FHFB), the Office of Federal Housing Enterprise Oversight (OFHEO), and the...
-
The Federal National Mortgage Association, commonly known as Fannie Mae, is a United States government-sponsored enterprise and, since 1968, a publicly traded company.