NEW YORK – Aug. 21, 2013 – The summer of 2013 has seen a new kind of blockbuster that could be titled: “Honey, I Shrunk the Jumbo Rate.”
The spread between average rates for jumbo loans and government-backed conforming loans is the narrowest in five years – even with the recent rise in interest rates.
“Our jumbo and conforming rates are neck-and-neck, both on the fixed and the ARM,” said Cyndee Kendall, a Bank of the West senior vice president in the San Francisco Bay Area. “There’s next to no difference between the two.”
The average rate for a 30-year fixed-rate jumbo was 4.69 percent on Aug. 9, compared with 4.51 percent for a 30-year fixed-rate conforming loan, according to HSH.com, which tracks rate trends. Lender enthusiasm for jumbos has generated a 20 percent rise in origination volume just from the first to second quarter of 2013. And by year’s end, volume is expected to hit $220 billion, according to Inside Mortgage Finance, which covers the industry.