Credit Unions Consider Jumbo Mortgages as Home Prices Continue to Rise

Low interest rates continue to sustain momentum in the mortgage lending market. The Mortgage Bankers Association’s most recent weekly mortgage loan application index surged 25.6% to levels not seen since July 2003. The high activity has led Freddie Mac to suggest that housing activity in 2004 could surpass the record levels achieved in 2003.

 
 

Low interest rates continue to sustain momentum in the mortgage lending market. The Mortgage Bankers Association’s most recent weekly mortgage loan application index surged 25.6% to levels not seen since July 2003. The high activity has led Freddie Mac to suggest that housing activity in 2004 could surpass the record levels achieved in 2003.

While driving mortgage lending activity, low interest rates are also leading to an ongoing rise in housing prices as consumers can be more aggressive since they are able to lock in low monthly payments on higher priced properties that might have been out of their reach previously. Freddie Mac reports that price appreciation on houses rose at an amazing 17.8% annualized rate in the fourth quarter of 2003. While this rate of appreciation is unusual, prices have risen at least 7.6% in each of the past three years. The trend is expected to continue in 2004 with a projected rise of 7.8%.

 

 

 

March 22, 2004


Comments

 
 
 
  • We are constantly approving home loans where the underlying appraisal is $1mm or more. Fortunately the members have a lot of their equity from a home they are selling and I can only remember one that was 80%.
    Anonymous