According to Zillow.com, the number of jumbo mortgage loans – loans in excess of $417,000 in most states – has increased 13 percent since 2012 for loans with a 25 percent down payment. One of the cities experiencing rapid growth in jumbo loans is Denver, Colorado and brokers in that area are taking note.
“We’ve noticed an increase in jumbo mortgages but the problem is the value just isn’t there,” St. Marks Sanders of The Mortgage Network told Mortgage Professional America. “There aren’t enough sales, so prices aren’t increasing (enough); it’s always a good thing when we see a spike in jumbo loans -- it does help the economy – but it’s a catch-22 when there aren’t enough sales.”
Still, it’s surely a sign that the housing market is continuing to recover.
Larger loans mean higher commissions for originators, but at what cost? Are certain buyers being priced out of the market?
One area originator doesn’t believe so.
“If the lenders can handle the volume, it’s a good thing,” Neil Christianson, branch manager for Citywide Home Loans told MPA. “I think personal income is on pace to absorb the excess costs.”
loans have seen an 82.3 percent increase since 2012, according to Zillow. Prices have for the most part followed and, as a result, loan limits have been raised from the standard $417,000 to $424,350 this year.
The median home price in Denver reached $297,700 in May of this year.
It’s not just hot markets like Manhattan and San Francisco experiencing a spike in jumbo loans – the trend is spreading across the nation.