Executives from Fannie Mae and Freddie Mac told Congress on Thursday that they are reducing interest rates on some jumbo mortgages.
They said their more aggressive purchases in recent weeks of loans between $417,000 and $729,750 have brought rates down.
Prices still remain relatively high compared to rates for lower amounts because investors believe borrowers will refinance as soon as rates decline.
HSH Associates, a financial publisher in Pompton Plains, N.J., said its surveys showed the average rate last week for a 30-year fixed-rate mortgage of $417,000 or less eligible for sale to Fannie or Freddie was 6.17 percent. The average for such loans of between $417,000 and $729,750 was 6.61 percent, or 0.44 of a percentage point higher.
Source: The Wall Street Journal, James R. Hagerty (05/23/2008)
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