The recent decline was more in line with activity early last year, when jumbo volume was 2% greater in the first half of 2023. CoreLogic blamed the slowdown in bigger home loans on the higher mortgage rates and home prices affecting buyers of all incomes across the market. 

Among the nation's jumbo borrowers, just 4% have a rate above 7%, the property and data analytics firm reported. The overwhelming majority of consumers with larger mortgages, or 75%, have mortgage rates under 4%. 

The average contract interest rate for a 30-year fixed-rate jumbo loan was 6.73% last week, according to the Mortgage Bankers Association. During the short-lived, end-of-summer interest rate dip, jumbo rates according to the MBA's Weekly Application Survey touched down to 6.41%.

In July, 21% of all purchase loans were jumbo mortgages, CoreLogic said. That share isn't far from the 18% share reported in May 2020 at the onset of the coronavirus pandemic, the lowest mark since 2012. The share of jumbo refinances also rose and fell with the interest rate roller coaster in the past few years, but today sits at pre-pandemic levels at around 35% of all conventional refinances.

In another troubling sign, the jumbo portion of the MBA's Mortgage Credit Availability Index fell 2.6% in September from the previous month, part of the index's first overall decline since December 2023. 

Although rates continue to fluctuate, some positive signs from the recent dip have emerged. Pennymac Financial Services, in an earnings conference call last week, reported $1 billion in jumbo locks for the third quarter, compared to a paltry $22 million in the same period a year ago.

The Federal Housing Finance Agency's conforming loan limit this year is $766,550. Several mortgage lenders are already offering conforming loan limits for 1-to-4 unit properties up to 5% higher around $803,000, ahead of the government's usual announcement in late November.