America's wealthy house hunters are brushing off higher mortgage rates. In fact, demand for multimillion-dollar loans is booming. Originations over $5 million spiked more than 50% last year compared with 2024, according to Home Mortgage Disclosure Act data provided by the Mortgage Bankers Association.
The trend has persisted, say private bankers, who have seen elevated demand for multimillion-dollar loans since last year. The spike in so-called superjumbo loans defies the narrative that the ultrarich just pay cash. "It's a little bit unexpected," said Jon Kessler, head of Credit & Cash Management Solutions at PNC Private Bank. "We had a view that maybe this activity would fall off a little bit due to the rising rate environment, but it has been fairly consistent and fairly strong."
A booming stock market explains some of the trend. The S&P 500 index is up 12% this year; investors figure that's a much better return than tying up cash in a mansion.
The big loan spike mirrors big-ticket home sales last year: $5 million-plus transactions increased 8%, per Realtor.com. (News Corp, which owns Barron's, operates Realtor.com via its Move unit.) Wealthy house hunters are benefiting from a softening market, while average buyers get "crushed" by mortgage rates, said Joel Berner, a senior economist at Realtor.com. The crush should continue along with the superjumbos.
Write to Beckie Strum at beckie.strum@dowjones.com
Last Week
Scary AI
Markets were gripped with fear about the AI trade after Alphabet stock notched its worst day ever. Scarier still were stumbles from Intel and Amazon.com -- not to mention Nvidia's spy scandal. (See below.) The small-cap Russell 2000 may be looking good right now. Maybe...
From Beijing, With Love
One of the more bizarre stories of the week: The New York Times, followed by others, reported that a Singapore data-center exec may be a Beijing asset. And that she "had developed a close relationship with Nvidia CEO Jensen Huang." The kicker: President Donald Trump was briefed a while ago, but didn't act on it. Nvidia responded to the Times, in part: "Meetings with customers are a part of a CEO's job."
No-Layoff Layoffs
Microsoft plans to offer buyouts to 60,000 employees. (Gotta pay for Mr. AI.) It wouldn't call the get-out-of Redmond packages "layoffs." But if they don't reach a big enough number, you won't need AI to figure out what happens next.
Lawyer Up
Reports have been flying that Trump government officials and businesses are, in anticipation of the Democrats winning control of Congress, reaching out to consultants and law firms for help. They fear retribution. (Hmm, why?) But as the Journal pointed out, some companies are preparing for a possible handover the old-fashioned way: sending cash to Democrat political committees.
Next Week
Monday 11/2
Apple, Palantir Technologies, and Vertex Pharmaceuticals release earnings on Monday, followed by Advanced Micro Devices, Amgen, Booking Holdings, and Pfizer on Tuesday. CVS Health, McDonald's, Qualcomm, and Uber Technologies report their results on Wednesday, while Airbnb and ConocoPhillips do?the same on Thursday.
The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index for October. Consensus estimate is for a 54.7 reading, slightly higher than in September.
Tuesday 11/3
American voters head to the polls for the midterm elections, with congressional power at stake. Republicans currently hold a slim majority in the House of Representatives and Senate. Polling suggests that Democrats are a sizable favorite to retake control of the House, while the Senate is closer to a coin flip.
Friday 11/6
The Bureau of Labor Statistics releases the jobs report for October. Economists forecast a 62,000 increase in nonfarm payrolls, after a 29,000 gain in September. The unemployment rate is expected to remain unchanged at 4.2%.
The Numbers
$40 T
Anthropic's view of its market, as suggested in its IPO filing; it's the same size as the national debt.
$0
AI's financial payoff so far to corporate America beyond tech firms, per economist Torsten Sløk.
$31.6 B
Decline in Alphabet co-founder Larry Page's net worth, 11%, as a result of the firm's stock tumble on Oct. 29.
13.9 M
Homes that older households may sell in the next 10 years, 34% above the past decade's pace for seniors' sales.
Write to editors@barrons.com
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