In an unusual move, jumbo mortgages are becoming a bigger bargain over conforming loans. Lenders are offering jumbo loans at lower ratees - more than a quarter of a point - than conforming loans backed by Fannie May and Freddie Mac

Government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles, where the limit is $625,500. Generally, banks charge about a quarter of a point more than conforming loans, according to the Mortgage Bankers Association. But lately that trend has been reversed

For example, Wells Fargo, is offering a 30-year jumbo mortgage rate this week at (Nove 14) at 4.125%. In comparison, it's offering a 30-year fixed rate conforming mortgage at 4.5%, a .375% savings. U.S. Bank is offering a jumbo mortgage for 3.875% compared with  4.25% for a conforming loan.

Tom: This is excellent news for our local real estate market because as prices go up more buyers will be requiring jumbo loans. There are fewer and fewer gulf-access homes in the nicer areas for under $417,000, and in the not-so-distant future I expect $450,000 to be bottom point to buy decent sized gulf-access homes that are less than 10 years in good neighborhoods. Approximately 52% of gulf-access homes sales  in Lee County are via loan, and I expect that percentage to rise as prices here continue to rise.