The US Jumbo Loan market continues to perform extremely well in 2015 after an already wonderful 2015. A jumbo loan is any loan where more than $417,000 is borrowed for a home purchase. In high priced markets, jumbo loans are not counted until someone borrows $625,000.
In 2014, jumbo loans took 19% of the total mortgage market, which had not been seen since 2002. In 2015, that number has risen to 20%. Even more enlightening, after only taking 1% more market share for total mortgages, jumbo loans took 36% more dollar volume than in 2014, reaching 160 billion in the first half of the year. Among other things, that difference in dollar volume really highlights how much stronger the overall housing market has become in the past few years. Home values continue to rise across much of the US, raising the average dollar spent on each loan taken out.
The Federal Reserve did not raise their interest rates in the first half of the year as many experts predicted, and high-end borrowers took advantage of low rates to refinance their home. But when the Fed ultimately raises the rates, its not expected to seriously hamper the jumbo loan market because most jumbo borrowers have significant assets and cash reserves.
Jumbo loans never dipped below conforming loans as they did last year, suggesting it was more than just low rates that have been re-attracting jumbo borrowers to the housing market.
So far in 2015, rates hit their lowest in April at 3.82% and their highest in June at 4.15 percent.