Mortgage demand is peaking, pending sales are up, and FHFA just significantly raised conforming loan limits for 2026. This means more affordable financing and increased purchasing power for homebuyers and sellers.
Each week, I analyze the evolving dynamics of the market, identifying emerging trends, shifts in momentum, and key considerations for real estate professionals. Last week, purchase mortgage applications reached a 2025 high, supported by rates approaching 6%. Pending home sales increased 1.9% from September, driven by gains in the Northeast, Midwest, and South, while the West continued to soften. In addition, the Federal Housing Finance Agency (FHFA) announced higher conforming loan limits for 2026, raising the baseline to $832,750 and setting the high-cost ceiling at $1,249,125.
Below are key events from the fourth week of November impacting our business.
December 1, 2025
PURCHASE MORTGAGE APPLICATIONS REACH A 2025 PEAK. Since late 2022, mortgage rates falling below 6.64% and approaching 6% have consistently supported stronger housing activity. This dynamic has driven the most favorable 17-week stretch of purchase loan applications, culminating in a year-to-date high reported by the Mortgage Bankers Association just before Thanksgiving. Applications rose 20% year-over-year, while weekly demand advanced by 8%.
Full story from HOUSINGWIRE →
- Why this Matters: These results underscore the sensitivity of housing demand to rate movements and highlight the market’s resilience in the face of broader economic pressures. Easing mortgage rates creates a window of opportunity for buyers to enter the market under more favorable financial conditions.
U.S. PENDING HOME SALES ROSE IN OCTOBER. Pending home sales improved in October 2025, supported by lower borrowing costs and stronger buyer sentiment. The National Association of REALTORS® reported a 1.9% monthly but a slight year-over-year decrease (-0.4%) in its Pending Home Sales Index, The Northeast, Midwest, and South saw month-over-month gains, while the West continued to soften. The Midwest led with a 5.3% monthly rise and modest annual growth, while the South recorded both monthly and yearly gains. The Northeast saw a monthly uptick but remained below last year’s levels, and the West experienced declines on both measures.
Full story from WORLDPROPERTYJOURNAL →
- Why this Matters: Pending home sales reflects both affordability and confidence in the housing market, which directly influence buying opportunities and financial decisions. Overall, easing mortgage rates, steady employment conditions, and resilient demand create a window of opportunity for consumers to enter the market with greater affordability and confidence as 2026 approaches.
FHFA ANNOUNCES CONFORMING LOAN LIMIT VALUES FOR 2026. The Federal Housing Finance Agency (FHFA) announced updated conforming loan limits for 2026, which determine the maximum mortgage sizes Fannie Mae and Freddie Mac can acquire. The baseline limit for one-unit properties will rise to $832,750, reflecting a 3.26% increase in national home prices between the third quarters of 2024 and 2025. This represents a $26,250 increase from the 2025 limit. In high-cost areas where local median values exceed the baseline threshold, limits will be higher, with the statutory ceiling set at 150% of the baseline. As a result, the maximum limit for one-unit properties in these regions will be $1,249,125.
Full story from FHFA →
- Why this Matters: Conforming loan limits directly influence affordability and financing options. By raising the limits, more buyers can qualify for conventional loans rather than relying on costlier jumbo loans, which often carry stricter requirements and higher interest rates. This expansion of access to credit translates into lower borrowing costs, as conventional loans typically offer reduced rates and fees, helping consumers manage monthly payments more effectively. The higher ceiling of $1,249,125 also provides greater flexibility in high-cost areas, allowing buyers to maintain purchasing power without moving into non-conforming loan categories. Importantly, the adjustment reflects national home price appreciation, ensuring that loan limits remain aligned with market conditions. In short, these higher limits broaden financing options and help households navigate affordability challenges in a rising-price environment.
THE BOTTOM LINE: For buyers, easing mortgage rates and expanded loan limits create a window of opportunity to secure more affordable financing and broaden purchasing power, particularly in high-cost markets. For sellers, stronger demand and improved sentiment support property values and expand the pool of qualified buyers. Collectively, moderating mortgage rates, resilient labor markets, and expanded loan limits point to a more favorable housing environment as the market transitions into 2026, underscoring the importance of timing and strategic guidance in navigating evolving market conditions.
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