Nearly two years after the credit crunch virtually froze mortgage markets, high-end borrowers are seeing some relief: Rates for "jumbo" mortgages on pricier homes are at their lowest since 2003.Just a year ago, the average rate on a 30-year jumbo mortgage—a loan of more than $729,750 not backed by government-sponsored agencies Fannie Mae or Freddie Mac—was 6.86%, according to Greg McBride, a senior financial analyst at Bankrate.com. Now it is 5.48%—a rate that rivals those available during the height of the credit bonanza."In just the past couple of months, jumbo loans have really started to be competitively priced," says Keith Gumbinger of HSH Associates, a publisher of consumer-loan information.The lower rates signal relief for homeowners looking to shed an onerous mortgage—and for the high-end housing market itself. More-affordable jumbo loans will likely whet appetites for new home purchases, helping to stabilize prices at the upper end of the market. For consumers, the lower rates will make home purchases more affordable and enable existing homeowners to trim their monthly bills by refinancing.
By Jessica Silver-Greenberg, July 10 ,2010 WSJ