Why have I only found items as high as level 61 even though I am now level 66?
I've played Act V up to Urzael, leveling my monk to 66 at the boss kill. The highest item level of any item I've found is level 61. I would have expected to find higher level items at this point.
Is this by design? Why am I not finding items higher than level 61?
In summary, you are going to get level 61/66/70 items as appropriate for your level with the exception of legendary items that scale to your current level. So expect a bit of hardship as you grind from 61 -> 66 as far as rares and blues go.
Blizzard later clarified the confusion in a blue post. I'll leave my original research below but here is the definitive blue post on the matter (source
It looks like there was a little confusion on this topic, so allow me to clarify - there is not a bug involved here. Required level is not the same thing as an item’s power level, and it definitely does not mean a level 69 character should feel uncomfortable about using an item that specifies “Requires Level 61.” Items saying "Requires Level 61" on them is by design. The item can be at a power level intended for level 68 or 69 characters but we let players use it at Level 61 - this is intentional.
A primary boon of this approach is you know that items you find early on in your leveling experience (around 61-62) aren't replaced immediately upon reaching 63. That awesome item you found at 61 should be able to stick with you up through 69. When there are too many tiers of items, you transition through them rapidly and the items start to feel transient. Why bother gemming or enchanting an item if you expect to find an upgrade in 30 minutes? The Mystic’s Enchanting is powerful, but it doesn't feel worth using if you don’t have confidence your item will still be useful in 2 levels. Another benefit of this design choice is that it is alt-friendly. We think it's really fun to have the option to twink characters. Why not allow items you find at the upper echelons of the 60's to be passed down to your new characters fairly easily?
This does have some downsides, including that upgrades can feel a little sparse between the latter levels before cap (66-69). However, in this situation, we felt the benefits outweighed the detriments and it keeps the element of randomness that we feel is core to the Diablo experience. We want to ensure there is a chance to find an amazing top tier item the moment you ding 61 and get to hold on to it for hours if fortune smiles upon you, though that may mean it takes a little longer to find an upgrade for that particular slot.
My initial readings made it seem like this was a bug but it appears it is intentional due to the item levels that were added in RoS. Here is a summary of how it is currently working summarized in this reddit post:
It's not a bug, it's just a misunderstanding of the loot system. All items have a base item with a specific level requirement, as another response posted, the only items added in ros are at the lvl 61/66/70 levels. Those are the only level of items that can drop(ignoring legendaries that out match your level). Once you are past 66 you should mostly or always get lvl 66 items, and at 70 you will get level 70 items.
All items that drop are from a base version like this, it looks like many item types don't even have a lvl 66 version.
Here a couple other sources backing it up: