Conforming Loan Limits Remain Unchanged

The Office of Federal Housing Enterprise Oversight (OFHEO) has announced as expected that 2007 dollar limits on conforming mortgages would remain unchanged from 2006 levels, at $417,000. This limit is set based on the October-to-October change in the average house price in the Monthly Interest Rate Survey of the Federal Housing Finance Board. It was widely expected that this average figure would decline and OFHEO had advised lenders earlier this month that, to prevent disruptions in the mortgage process, any decline in average home prices would not be reflected in the conforming loan limit until 2008. As it turned out, the FHFB survey reported only a very small decline in the average price, from $306,759 in October 2005 to $306,258 last month, a change of $501.00 or 0.16 percent.