Jumbo loans, those greater than 417K in most areas of the U.S., including Lane County, are becoming delinquent with increasing frequency, according to a recent WSJ article. The rate of jumbos greater than 3 months delinquent has shot up to 6.9%, nearly a 3-fold increase from last year.

Jumbo loans are more expensive than conventional conforming loans, usually by at least 1.5%. The reason: Without the government backing of Fredie Mae or Fannie Mac, investors perceive more risk and demand a higher yield.

So, what does this mean? The market for higher-end houses requiring jumbo loans should be soft. Larger down payments, higher interest rates, and great credit scores reduce the amount that buyers will pay. But, if you have the money, now’s a good time to buy.

Pittock Mansion in Portland. Used with permission.