Rates on Jumbo Mortgages Climb
Rates on jumbo mortgages
— those that exceed the $417,000 limit eligible for purchase and guarantee by Fannie Mae and Freddie Mac — have climbed to 7.34 percent, up from 7.1 percent last week and 6.5 percent in mid-May. These mortgages account for about 16 percent of the mortgage market, according to the trade publication, Inside Mortgage Finance.The higher rates tend to push home prices downward in neighborhoods where prices are above $500,000.Rates are rising because investors, stung by the subprime market, are demanding more return, even though foreclosures rates on prime mortgages have remained low, says Doug Duncan, chief economist of the Mortgage Bankers Association. Fannie Mae officials have asked the Office of Federal Housing Enterprise Oversight to raise its current cap so it can buy larger mortgages, but because of the companies’ recent accounting problems, that seems unlikely, analysts say.Source: The Wall Street Journal, James R. Hagerty (08/07/07)
Comment Notification
Subscribe to this post's comments using
Copyright Metro North Realty