Magazine article Mortgage Banking

Month in Review

Magazine article Mortgage Banking

Month in Review

Article excerpt

Since last summer, we've witnessed an anomaly where interest rates on jumbo mortgages have plunged below conforming mortgages. Borrowing rates for jumbo mortgages, which are too large for government backing, historically have been set higher than rates on conforming loans, which are backed by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac. However, in the past year, this has flipped. Since December 2013, the average annual percentage rate (APR) for the 30-year jumbo fixed-rate mortgage (FRM) has been lower than the 30-year conforming FRM by an average of 3/8 of 1 percent. These aggressive jumbo rates are attributable to a combination of interest- rate volatility, government policy and banks flush with cash that are enjoying lower funding costs, making jumbo mortgages attractive. As of May 1, 2014, the 30-year fixed jumbo average APR is 4.059 percent and the 30-year fixed conforming average APR is 4.311 percent. With the hot summer buying season around the corner, this anomaly is good news for well-heeled homebuyers.

MONTHLY AVERAGES            28-JUN    31-JUL    30-AUG    30-SEP

15-Year Fixed Conforming     3.626     3.682     3.678     3.459
30-Year Fixed Conforming     4.430     4.586     4.614     4.284
30-Year Fixed Jumbo          4.375     4.522     4.523     4.178
5/1 ARM Conforming           3.095     3.147     3.112     2.978
5/1 ARM Jumbo                3.004     2.981     2.980     2.888

MONTHLY AVERAGES            31-OCT    27-NOV    31-DEC    31-JAN

15-Year Fixed Conforming     3. … 
Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.