The new conventional loan amount for 2022 was announced today at 647,200 up from 548,250 in 2021. This is the highest loan you can take out to keep it under jumbo loan amounts. This is obviously a HUGE move based on the rapid housing appreciation year over year. We can lock and even close loans at this level for the reminder of this year, and of course in 2022.

If you have been considering taking out cash but bumped up against the old number or have a current loan between these two numbers it might be a great time to look at refinancing.

This is wild. Most of my lending career was all 417,000.

Under 300k when I first started! Crazy indeed.

Hadn't thought of that but I can see it.

Sort of a derail. My first house 40 years ago I bought down the interest rate by paying 6 points and the rate was still around 13%. The house was $67,000 and was above Landa Park in New Braunfels. Wish I still owned that little house.

How do jumbo interest rates currently compare to conventional rates?

ALL rates/terms depends on loan to value, credit score and a host other issues where umbo rates/term depend on these items even more then conventional rates in that to get best rates etc you will need at least 20% and top shelf credit. But, assuming those items jumbo is just an .125% or so higher.

But, for the average buyer with say a 700 credit score this new conventional number will make financing more attractive then it would be for a jumbo loan.

Does history have any examples of reckonings after easy credit / foolish spending sprees?

sure does but lending standards today are FAR and AWAY different from when mid 2000's on the loans that caused the crash. Conventional loans were never the issue back then, but rather subprime lending. and just because Fannie/Freddie will back higher loan amounts does not mean the required debt to income is changing.

Will this cause folks to but my a higher value home then they other wise would? likely will, and it is never a great idea to stretch your housing budget just because you can but they will still have to be qualified for that house.