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Average Price of U.S. House Rises 8.5 Pct

WASHINGTON (Reuters) - The October average U.S. house price jumped 8.5 percent from a year ago, setting the stage for mortgage giants Fannie Mae and Freddie Mac to raise the limit on mortgages they can buy, a Federal Housing Finance Board survey showed on Tuesday. The average house price rose to $264,540 last month from $243,756 in the same month a year ago, the FHFB said in a statement. The increase paves the way for Fannie Mae (FNM.N: Quote , Profile , Research ) and Freddie Mac (FRE.N: Quote , Profile , Research ) -- government-sponsored enterprises that buy mortgages from lenders and hold them or repackage them as securities for investors -- to buy loans up to about $359,500. Their current limit is $333,700. The increase would mean that home buyers could borrow up to that amount, known as the conforming loan limit, at interest rates of about a half of a percentage point lower than for bigger mortgages, referred to as jumbo loans. Assuming a 20 percent down payment, buyers of houses costing up to about $450,000 would qualify for the lower-cost loans. The enterprises may raise their loan purchase ceiling once a year by the rate of change in the FHFB's October survey. Because the companies erred in calculating the 2004 limit, the new conforming loan limit will be increased from $331,400, the FHFB said. Fannie Mae and Freddie Mac's financial regulator, the Office of Federal Housing Enterprise Oversight, is due to announce the conforming loan limit change later Tuesday. Source: reuters.com

1.Average Price of U.S. House Rises 8.5 Pct
 http://www.news-from-newspapers.com/en/reuters.com/2004/11/28/Average_Price_of_U.S._House_Rises_8.5_Pct.html











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