While the general housing sector appears to be rebounding in many parts of the country, the market for high-end houses—those priced at $750,000 or higher—remains weak, according to a recent article in The Wall Street Journal.
A variety of circumstances are conspiring to delay the high-end home market’s recovery. Potential high-end buyers don’t qualify for the federal tax credit for first-time buyers, nor are they entitled to government-backed low-interest mortgages. They’re also feeling the pinch from lenders, who are raising interest rates on jumbo mortgages and requiring higher down payments. Meanwhile, white-collar job losses continue to mount and mortgage defaults among high-end homeowners are increasing. High-end homes also have become less attractive than they were during the boom years; many potential buyers are now shopping instead for more efficient, sensibly scaled homes, either for financial or ecological reasons. Read the article (subscription required) here.
Also read this blog post on CBSNews.com for additional perspective on the high-priced home market.
