Slow thaw; Jumbo loans and the market for pricey homes show signs of revival
Since the collapse of the housing market, home buyers trying to a secure mortgage of more than $729,750 have faced higher interest rates and tough new standards to even qualify for a loan.</br></br>Now the market for these "jumbo" loans is starting to thaw. The average interest rate for a 30-year fixed-rate jumbo mortgage stood at about 5.8 percent this week, according to HSH Associates. That is near historic lows and down significantly from the height of the financial crisis, when it was near 8 percent.</br></br>"Things have been steadily getting better," said Keith Gumbinger, vice president at the research firm.</br></br>But the market is still far from normal, he said. The disparity in the rates offered for jumbo mortgages and traditional ones (which also carry rates near record lows) remains wider than normal, Gumbinger said. "Normalcy is returning, but I would by no means say it has returned," he said.</br></br>Before the housing market collapsed, jumbo loans were those for more than $417,000. But Congress temporarily increased that limit for high-priced parts of the country, including the Washington area. Through at least the end of this year, jumbos start at $729,750. They are still considered the most difficult to get.