Mortgage Crisis Hits Affluent Buyers, Too

Even borrowers with excellent credit are now facing higher rates
By Peter Fearon,  Newser Staff
Posted Aug 7, 2007 5:48 AM CDT
Realtors take a first look at a new $489,000 home going on the market, Friday, July 6, 2007, in Draper, Utah. Sales of new homes fell in June by the largest amount in five months as the housing industry...   (Associated Press)
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(Newser) – Mortgage tremors have rippled so far across the home loan market that even buyers of high-priced homes with good credit records are now being squeezed, the Wall Street Journal reports. Rates have surged on loans above $417,000 for prime borrowers—to 7.34% for a 30-year fixed-rate mortgage, up from 6.5% in May.

The higher costs for so-called jumbo loans will further depress the real estate market. The credit crisis has crashed two hedge funds, put dozens of lenders out of business and triggered turmoil on global markets.  The crisis is also exacting a toll on individual families who no longer qualify for mortgages—or can't afford increased rates.