Home Prices Rise and Jumbo Rates Fall

Home Prices increased 1.7% in January from December. This is the first time that home values have increased in over a year. This was an unexpected increase and was due in part to strong sales in same areas of the country including the Pacific Northwest, an area that has seen some of the largest price drops during this downturn.

While the increase is good news – we will need to see a string of months in a row with increases before we can get too excited.

The Jumbo rates are declining! Jumbo mortgages are those mortgages that are too large to be bought by Freddie Mac or Fannie Mae. Loans that are bought by Fannie and Freddie are considered conforming and the limit for those government-backed entities is $417,000 in many parts of the country, but goes as high as $729,750 in high-cost areas of the United States.

Bank of America recently began advertising its jumbo program, offering 30-year fixed-rate jumbo mortgages with rates in the high 5% range. This is impressive considering the average jumbo rate is much higher. "We decided it was time to really go after that market," said Vijay Lala, product management executive for BOA.

More lenders are looking like they will join the party.

The average 30-year fixed-rate jumbo mortgage averaged 6.5% for the week ended March 27 -- the lowest since May 2007, according to HSH Associates, a publisher of consumer loan information. On Oct. 31, the average rate on a 30-year fixed-rate jumbo mortgage was 7.9%!

So more good news for the overall housing market. The housing market needs these Jumbo rates to continue to drop so more borrowers can qualify for these more expensive homes. There is a huge inventory of these homes on the market and when the rates drop like they have been it brings more people into the market, because more people will be able to afford them.

If you need a mortgage – Jumbo, conforming or FHA check out www.thebriteway.com.

Happy Monday!