Jumbo mortgage lending hit an estimated $160 billion in the first half of the year, up 36 percent from the same time last year, as interest rates overall remained steady, according to a publisher who tracks the jumbo market.
Guy Cecala, publisher of Inside Mortgage Finance, also reports that jumbos accounted for approximately 20 percent of total mortgage originations, close to levels before the 2007-2009 economic recession.
Jumbo mortgages are defined as those in excess of $417,000 in most of the country and $625,000 in certain high-price places.
“The last six months have been great for jumbos,” said John Walsh, president of Total Mortgage Services, based in Milford, Connecticut, which is a lender in 34 states. The biggest markets for jumbo loans used to buy homes include North Carolina, South Carolina, California and Florida.
Despite speculation that banks will bump up against preset limits for jumbos as a percentage of their mortgage loan portfolios, “we frankly haven’t seen that yet,” Cecala said. “Jumbo mortgages are one of their best yield portfolio products.”
According to rate-tracking website HSH.com, the average interest rate on an adjustable-rate jumbo mortgage with a five-year term was 3.03 percent on June 26, up from 2.83 percent in April, but down from 3.11 percent at the beginning of the year. [Wall Street Journal] – Mike Seemuth