From ZeroHedge
As home sales drop and home prices surge, the shifting sands of the housing market are accelerating in a seemingly inequality-expanding manner. As first-time homebuyers struggle to qualify for mortgages in a market that’s shrinking after the housing collapse, Bloomberg reports that lenders are providing more multi-million dollar loans to Americans who (in their opinion) pose less risk. Home loans from $1-5 million were the fastest growing part of the jumbo market in January with the number of loans surging to the highest since 2007.
Still unsure who rules the world?
Home loans from $1 million to $5 million were the fastest growing part of the jumbo market in January, according to purchase application data from the Mortgage Bankers Association. Wealthy borrowers are seeking even bigger loans this year while luxury housing prices rise and lenders lure them with competitive terms.
As first-time homebuyers struggle to qualify for mortgages in a market that’s shrinking after the housing collapse, lenders are providing more multi-million dollar loans to Americans who pose less risk.
The reason…
An improving economy as well as a surging U.S. stock market, which rose to a record last week, is helping more borrowers afford the mega mortgages, said Lawrence Yun, the chief economist at the National Association of Realtors.
So unrealized gains in artificially inflated US equity preices are inflating prices and sales in the super-luxury home market.
Applications for mortgages from $1 million to $5 million to buy homes rose 16 percent in January from a year earlier, MBA data show. In January 2014, requests for home loans from $625,000 to $1 million comprised the fastest growing parts of the jumbo market.
After lenders raised credit standards following the 2008 financial crisis, many lower-income Americans have been shut out of the market. In January, applications for loans of less than $150,000 to purchase homes fell 12 percent compared with a year earlier, MBA data show.
“In the post-mortgage meltdown, larger banks are reevaluating the segments they want to get more aggressive on and the jumbo consumer is attractive not just as a mortgage client, but as a wealth management client,”
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You either have (and get more) or you don’t…
http://www.zerohedge.com/news/2015-02-24/forget-first-time-homebuyers-its-million-dollar-mortgage-world
