Is it getting cheaper to buy a big house?

Interest rates on jumbo mortgages are no longer tremendously higher than those on conforming loans.

By MSN Real Estate partner Feb 5, 2014 7:46AM

© CorbisBy CNBC

 

It's getting cheaper and cheaper to buy a big house.

 

The latest weekly applications data from the Mortgage Bankers Association shows a widening gap between the rate on so-called conforming mortgages ($417,000 or less) and jumbo mortgages (those above $417,000).

 

The gap in the latest week was five basis points, which may not seem like much.

 

But just six months ago, jumbos were 15 basis points more expensive than conforming loans, and a year ago they were 48 points more expensive, according to Barchart.com.

 

Jumbo loans have historically been more expensive because of the higher risk and fees involved, but that relationship has reversed in recent months as fees rise at Fannie Mae and Freddie Mac.

 

Source: Mortgage Bankers Association

 

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Tags: loans
 
22Comments
Feb 5, 2014 10:53AM
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This is part of our problem as a society, keeping up with the Jonses.  We knew a couple that bought a 3,500 square foot house for them and 2 kids.  After figuring out the heating/cooling/taxes/payement/upkeep/electrical bill, they moved to a 2000 sqft home.  Our mindset in this country must change to a "I know I can afford it, but do I need it" type mentality.   This is for the good and the survival of the human race.
Feb 5, 2014 10:17AM
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I guess everything is relevant....If you live in a fairly large house are comfortable and can afford it...

Some people just don't want to move or ever move again.

Others are ready to downsize, sell and lease condos etc...

Have a Winter place and one for the Summer or travel vagabond style moving with seasons in a 5th. wheel or Motorhome...

Guess it all depends on what you call home and enjoy the most...

As you get older in life you realize, keeping up with the Joneses isn't really all that important.

Yes unless having a "mini-home" built, most houses today are probably closer to 2000sft. then like 800sft. of 40-50 years ago..

They wanted them built and livable, quickly after WW2 and Korea.

Many were m****duced...

Feb 5, 2014 10:14AM
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Big houses come with big taxes and upkeep
Feb 5, 2014 9:55AM
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Big houses?  It's all in comparison. When World War II ended m****duction houses began to be built by the thousands.  Average size: 750 s.f.  Today, average size is around 2000.  So "Big Houses" now are anywhere from 3500 s.f. to infinity.  It only makes sense to own houses of that extra large size if there are two or three generations living together under one roof.  Otherwise the person or couple are  very small peas rattling around in an oversized pod and trying to appear more affluent than they are.  Now the boomers are mostly downsizing  and that probably is putting  downward pressure on  jumbo mortgage rates.

Feb 5, 2014 9:54AM
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Most of the real estate in our area ($500K and less) has pretty much stabilized after the big freefall of the last few years.  That being said, a lot of the top end homes ($1.5M- $4M) have continued to drop month after month and are still dropping.  I recently saw a house that had once sold for  $1,999,999.00 was now listed for $899,000.00  I would sure hate to be the person that had paid the previous time.  Of course; that is the way it is with real estate.  It's just like musical chairs.  Once the music stops, that last person always ends up getting screwed.
Feb 5, 2014 9:24AM
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If you can afford it, go for it. This IS America,,after all.
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Hmmmmm....

Sounds like the bank is over loaded with big houses they want to dump....

Feb 5, 2014 8:41AM
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By all means... ignore the Tsunami Wave of economic warnings and buy as big of house as your pathetic ego mesmerizes you into buying. Don't worry... your paper and button pushing career job gotten by cheating and alumni connections will last forever. Not. 
Feb 5, 2014 8:39AM
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This article is so misleading. Simple economics people. If it becomes less expensive to buy the BIG house...then the BIG house will simply increase in value and it's PRICE will be more expensive instead. There will just be a transfer of value from the bank to the homeowner.
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