Core Insights - The Federal Housing Finance Agency (FHFA) is increasing the conforming loan limit for government-backed home loans to $832,750, reflecting rising housing prices [1][5] - This new limit represents a 3.3% increase from the previous year's level [1][4] - The FHFA adjusts conforming loan limits annually based on changes in U.S. home values, which have been increasing, albeit at a slower pace [3][4] Industry Overview - FHFA oversees Fannie Mae and Freddie Mac, which purchase home loans and guarantee them against default, subsequently bundling them into securities for investors [2] - Conforming loans are defined as those within the limits set by FHFA, while loans exceeding these limits are classified as jumbo loans [2] - The U.S. housing market has faced challenges since 2022, with mortgage rates rising from historic lows, leading to a significant decline in home sales [3][4] Market Trends - Home sales have remained sluggish in 2025, showing little change compared to the previous year, despite a recent decline in average mortgage rates [4] - The FHFA's House Price Index indicates a 3.3% increase in average U.S. home prices for the July-September quarter compared to the same period last year [4] - Higher conforming loan limits are permitted in certain states and counties with median home values significantly above the national average, such as Los Angeles and New York, where the limit will be $1,249,125 [5]