Mortgage Rates Dip Slightly For Week; New Home Sales Decline Sharply In November

Despite all the talk of Florida home loan rates rising in the coming year, they started 2006 off on the opposite note, falling 0.1 percent nationally last week to an average of 6.22 percent. This figure reflects the rate of 30-year, fixed-rate mortgages, and was compiled as part of Freddie Mac’s weekly Primary Mortgage Market Survey, conducted nationally.

The average rate is actually the lowest since October, but up roughly half a percentage point from a year ago (5.77 percent). Fixed-rate mortgages of the 15-year variety remained unchanged at 5.76 percent, according to the survey. A year ago, the 15-year mortgages went for 5.21 percent on average. Both the 15- and 30-year loans averaged 0.5 points last week.

Meanwhile, the U.S. Commerce Department released data showing that new home sales dropped 11 percent in November — the largest drop in nearly 12 years – as the market begins to cool off somewhat from its record highs. Analysts expect home sales (both new and existing) to drop in 2006 by about 6 percent, following five straight years of record growth. South Florida real estate experts predict a rise in mortgage rates to 7 percent will cause soaring home prices to plateau.

• The November decline in new construction sales was more than the 8.7 dropoff predicted on Wall Street.
• The median sales price fell 4.1 percent in November, to $225,200 nationally.
• That is up just 0.3 percent since November 2004, the weakest year-to-year price change in five years.

By area of the United States over this period of time, sales fell in every region except for the Northeast, which exhibited 13.4 percent growth — the typically slower-growth area’s biggest increase since January of 1994. Sales fell by a significant 22.1 percent in the West, a decline greater than any since 1995. New home sales dropped by 18.3 percent in the Midwest and 5.5 percent in the South.