Florida Home Loan Rates Rise Again

Mortgage applications fell for a second consecutive week, prompted by a decline in demand for Florida home loans as mortgage rates rose yet again. The Mortgage Bankers Association said on Wednesday that its index of home loan application activity for the week decreased 1.7 percent to 569.6 from the previous week’s 579.4.

The average cost of 30-year fixed-rate Florida home loans, not including fees, was 6.56 percent, up 0.06 percentage point from the previous week, and the highest level nationally since June 7, 2002, when an average of 6.65 percent was reached. The 30-year fixed-rate mortgage is the industry benchmark as it is the most common choice among borrowers.

The 6.56 percent average is more than a full point higher than the 2005 low of 5.47 percent, seen in June. Meanwhile, the adjustable-rate mortgage index fell 2.7 percent to 407.4 from 417.7 a week ago. Considered to be a timely gauge of U.S. home sales, the index is also substantially below a year-ago level of 466.7.

Refinancing applications decreased 0.4 percent compared to the previous week, while the refinance share of overall mortgage activity increased to 36.4 percent of total applications from 36.0 percent a week ago. Fixed 15-year Florida home loan rates averaged 6.19 percent for the week, up 0.02 percent. Rates on one-year adjustable-rate mortgages (ARMs) edged up from 5.97 percent to an even 6.00 percent.

For the past five years, low Florida home loan costs have fueled a real estate boom, helping support the state’s and the U.S. economy’s recovery from the recession many experts predicted. Analysts differ as to the full extent of the housing bubble, but most agree that U.S. housing markets are cooling off from their record run. The MBA’s data followed other reports this week that indicate housing tepidness.

Tuesday, the U.S. Commerce Department said U.S. housing construction has slowed more than was expected in March, with both starts and permits declining to their lowest levels in a year. The National Association of Home Builders said its index of U.S. home builder sentiment fell for a fourth consecutive month in April and hit its lowest level since November 2001. How this plays out in the Florida home loan market remains to be seen.