FHFA raises loan limit
The Federal Housing Finance Agency is increasing the limit on government-backed home loans, taking into account rising housing prices.
Starting next year, mortgage buyers Fannie Mae and Freddie Mac will be able to purchase loans of up to $832,750 for single-family homes in most of the country, the agency said Tuesday.
The new conforming loan limit is a 3.3% increase from its 2025 level.
The FHFA oversees Fannie Mae and Freddie Mac, which purchase home loans from banks and other lenders and guarantees them against default. These loans are then packaged into securities and sold to investors.
The FHFA caps the size of loans that Fannie Mae and Freddie Mac can purchase. These are called conforming loans, while mortgages exceeding that limit are classified as jumbo loans. Every year, the agency adjusts the conforming loan limit to track changes in U.S. home prices, which have been rising at a slower pace this year.
The FHFA’s house price index showed that, on average, home prices have increased 3.26% between the third quarter of 2024 and 2025.
The 2026 conforming loan limit for single-family homes will apply to most areas nationwide. However, the FHFA permits higher limits in certain states, such as Alaska and Hawaii, and in counties where the median home price exceeds twice the standard limit.
For instance, starting next year, the cap for single-family homes in Los Angeles and New York counties will be $1,249,125.
AI can replace nearly 12% of jobs, study says
Artificial intelligence could take over nearly 12% of existing jobs, according to a study published by the Massachusetts Institute of Technology.
That would boil down to $1.2 trillion in wages saved, touching industries from healthcare to finance for the country’s 151 million workers.
MIT’s Iceberg Index, launched this year, creates a “digital twin of the U.S. labor market” to examine areas susceptible to automation. It analyzes occupations by technologies used in the workplace and ties in interpersonal, physical and digital skills. Those calculations allow the index to identify what capabilities can be replicated by technology.
The index also offers an analysis map, down to the county, for how an area’s workers could be impacted.
Jobless claims drop
New claims for unemployment benefits hit a seven-month low last week, according to data from the Labor Department.
Claims decreased by 6,000 to a seasonally adjusted 216,000 for the week that ended Nov. 22. Still, 7,000 Americans reported continuing unemployment benefits after the initial week, increasing to 1.96 million. The increase signals a challenge in securing a new job.
Job creation in September — delayed due to the government shutdown — also showed 119,000 jobs were created. The unemployment rate ticked up from 4.3% to 4.4%.
The job market is one of the key economic indicators the Federal Reserve evaluates when considering interest rate cuts. These rates, while not directly tied to mortgages, exert an indirect influence on mortgage rates.