New York, NY, Nov. 26--The Federal Housing Finance Board on Tuesday said the average single-family home purchase price rose to $243,756 in October from $235,717 a year earlier, paving the way for U.S. housing agencies to raise their loan purchase limits.
An increase in the loan limits for mortgage finance giants Freddie Mac and Fannie Mae could allow more consumers to buy bigger homes, helping the U.S. economy's nascent rebound.
Freddie Mac and Fannie Mae giants sell guarantees for home loans to mortgage lenders. This guarantee allows lenders to resell the home loans as securities on Wall Street.
The Federal Housing Finance Board (FHFB) home-cost data helps determine the increase both agencies make on their loan purchase limits.
Congressionally chartered Freddie Mac and Fannie Mae are expected to announce their loan limit increases later Tuesday morning.
If they raise their loan limits, this could support buying of new and existing homes, already at a record high pace this year with interest rates at or near 45-year lows.
Higher loan limits would allow consumers to borrow more money and purchase larger homes.
Also, increased loan limits could spur some mortgage refinancings, reducing costs for some consumers who had higher-cost jumbo loans that previously were too large for Fannie Mae or Freddie Mac to guarantee and purchase.
In recent months, there has been speculation that the housing agencies could raise their loan limits to as much as $339,000 from the current limit of $322,700.
