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Forget First-Time Homebuyers, It's A Million-Dollar Mortgage World
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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"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair…"
Vancouver Canada crack shacks getting + $1 million mortgages.
So the best selling items are $1milllion homes & Mazeratis. Notice a trend? I wonder why?
Million-Dollar tear-downs yes sir live in my fuckin face. Home ownership for us student-loan drowned millenials is a damn lie, a grandiose deception, or several megatons of ponzi bullshit.
I'm not even mentioning the multi-million dollar house "safe-havens" left empty to rot and decay while the homeless and drug addicted bottom layer of population is swelling exponentially. Lets be clear here, the drugs are just a side-effect of a toxic social and economic environment, not a cause. Take all drugs away and then you'll get a real revolution. Truly makes Aldous Huxley's Brave New World look like a fineee place to be in.
The only hope I have is for the whole thing to blow up quickly so we can start fresh from the grounds up. It will blow up, just like any ponzi, the problem is the dumbed down populace might just turn to the flavor-of-the-age totalitarianism. IS THERE LIGHT AT THE END OF THE TUNNEL?!
Pro tip:
Learn to speak chinese and get realestate license in so cal.
That's the only thing keeping us afloat. A friend of mine was in shock her neighbor sold their home in 3 days for $750k cash.
Miffed
"IS THERE LIGHT AT THE END OF THE TUNNEL?!"
Oh yes, I see the light, but it's not what you / me like it to be. Approaching fast...
I drink to that!
million dollar house with 0 down, yeehhhaawww
my neighbor's mother makes $86 /hr on the computer . She has been laid off for 10 months but last month her pay was $21128 just working on the computer for a few hours. go to the website... www.globe-report.com
This i sworrisome news since the next Housin gBubble Crash will take out the higher end, overpriced houses first. Of course, if the money is being laundered who cares what the price is.
Boston Globe: "Home sales in MA down in Jan and Feb. It's because of the winter!"
Warren Group: "Um, we might be building another bubble"
Bubble? You say bubble??
"No one saw this coming," the bankers testified before the Committee.
But that's ok, because all the losses, gambling, risks were and still are passed on to the median overextened, broke, Middle Class sheeple.
LEHMAN!
No worries, the first time buyers will be able to pick up the $1MM+ properties on the cheap soon.
Until the million market collapes, have a drink from the punch bowl.
At least this time, when everything breaks down, the only people it will hurt are the ones who own something...which is, apparently 1% of the population.
Not enough young people earning enough money to move out and buy these homes as their first homes, economy is shit.
Whoever is buying homes is buying upgrade homes (selling their smaller house and moving up)... once they upgraded the demand will drop and even the value of these million$ + homes will drop.
If you are looking to sell your 300~900K$ home and to move into a 1.5~2.5m$ home , best to wait till the price gap between the two homes is smaller IMO.
Winter has nothing to do with it... if anything people work less in the winter have more time off and more time to look at homes to buy.
pretty soon every house in the usa will be worth >1mil.
Rarely does my father send me an email. He's just not of the modern generation. But when he does, it's usually worth it. Here's what he sent me today:
Very clever. Next question: what work needs to be done? And its corollary: what work doesn't need to be done?
https://homes.yahoo.com/news/states-where-the-middle-class-is-shrinking-...
Green shoots!
Ahh, Cali leading the way to be the next Detroit. I was upset to see Maine on there. The state of Maine has such nice population demographics, truly a shame.
60% to 70% of all the government work does not need to be done. Road and bridge work which is badly needed, subbed out to people that actually know what they are doing.
I will work for you while you are in prison as long as you will do the same for me. I could use the break and get better medical care that's free.
Miffed;-)
The more you borrow, the more (principal) you have to pay back. I guess this factoid is irrelevant since Paul Krugman has told me that "one man's debt is another man's asset".
everyone else to the re-education camps
Rent-a-shack-----You Are Not Here-----Own a Mansion
Are there any lean-twos and shacks available for $150k or less? I've heard that condos cost more than that. Anyone who who needs a loan that small is missing pocket change. ;^)
Use cash to buy. Sold two home to buy one this month. The balance of money will be used for upgrades. New tile, wood flooring. New kitchen, appliances and furnished. Then you charge a premium for weekly rental. No animals or you get hit with a $250 fee from me and I pay 150 HOA violation. Smoke outside. Walking distance to beach. Forest Beach HHI, SC. 2-3 week renovation program ahead, then back to Charleston for a few days. Then head off to our place in Myrtle Beach for 45 days. If you're breaking even or making 2% net gains. Dump property and move on to another location. Learn how to set up a network of services. It's cheaper than hiring a property manager. FYI
Are you on drugs ?????
Tooting on some type of mouthpiece. Real or imaginary?
Nice. Something I've always wanted to do. Someday I will, when I get some extra cash.
The serf can live in Blackstone town where the private equity guys own everything!
I keep telling you guys....you have to come to Sunny Melbourne Australia to see some real BS home prices......
it will make your head spin......
More evidence that 0% interest rates are needed.
Yup. And when the next collapse in real-estate prices arrives (very soon), which group of buyers is the quickest to default? Correct! Exactly these people buying megabucks properties.
Oh yeah, this is gonna work great. Because as we all know, these neo-bogus mortgages will be immediately dumped on pension and retirement funds. So the rich get richer, and everyone else gets the shaft. As always. Man, anyone who has a managed retirement account today is flat out crazy!
Be prepared.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Good luck.