Mortgage lenders are reportedly seeing a surge in demand for super-jumbo mortgages from wealthy home buyers who are taking advantage of historically low rates, while first-time home buyers are being shot out of the market due to more stringent lending standards resulting from increased government regulation.
According to Bloomberg News, many of these wealthy home buyers have significant liquid assets – in some cases enough cash to buy the homes outright – however, they often have "complex financial situations" that require them to rely on financing. Some of them are borrowing simply because they "choose to."
The number of loans from $1 million to $10 million to buy single-family homes in the 100 largest metropolitan areas surged to more than 15,000 in the second quarter, the highest ever, according to the report, citing data from CoreLogic.
For more, check out the Bloomberg News report.