High-end housing market is still languishing

According to the National Association of Realtors (NAR), home sales rose 2.9% in April from March. While sales in the low-end properties segment have risen, the market for high-end properties is still sluggish. Sherry Chris, chief executive of Better Homes and Gardens Real Estate, says, "We're looking at a dual market right now." Mortgage for expensive properties is getting difficult to obtain on account of lenders tightening their lending standards. The government controlled mortgage companies such as Fannie Mae and Freddie Mac cannot purchase loans above $730,000, which are commonly referred to as "jumbo" loans. Jumbo loans which accounted for 17% of the mortgage market two years ago, now account for just 5%. In most places, there is no significant interest for properties over $1 million. Ben Coleman, owner of Century 21 Hartford Properties, says, "That's where we're really feeling the pinch." Lawrence Yun, chief economist at NAR, has urged the Federal Reserve to buy up jumbo loans in order to restore liquidity in the high-end mortgage market.