
Last week, jumbo loans rates were around 5.79% -- down from above 7% in 2008 -- the lowest rates in 5 years. (In Los Angeles County, jumbo loans are above $729,750.) Some lenders have also reduced downpayment requirements for jumbo loans from 25% to 20%. "Stated income" loans are also reappearing on the market after being almost absent from two years.
How will this affect the Los Angeles market? In a big way. One reason for the decline in home prices in the $1 million + range is the lack of financing available to qualified buyers. Stories abound about high-earning individuals with substantial assets and excellent credit being denied loans which they could easily afford. As panic has subsided, lenders are tiptoeing into the jumbo loan market which should provide much-needed support to the upper housing tier.

In spite of continued government stimulus, the housing market is afflicted by consumers' woes: high unemployment, high debt loads and plenty of uncertainty. Although it is our belief that each month the housing market moves towards recovery -- it is still ill, weak and at best going from the ICU to bed rest.
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