Despite Fed’s Interest Rate Hike, Florida Home Loans Pushed Down Slightly For Week

Despite yet another interest rate hike from the Federal Reserve, rates on 30-year Florida home loans edged down this week, marking the first decline in six weeks.

Freddie Mac reported in its weekly survey that rates on 30-year fixed-rate mortgages averaged 6.58 percent, down a little from 6.59 percent last week, which had been the highest level in nearly four years.

Analysts attribute the decline in long-term Florida home loan rates, which had been growing more and more expensive and making life difficult on buyers, to last week’s unemployment report. The report showed payrolls grew by just 138,000 last month, amounting to the smallest gain in six months, and easing fears that the economy is growing so quickly that the Federal Reserve might keep raising rates throughout the summer.

The Fed did raise rates, as expected, for a 16th consecutive time at this week’s meeting, but its policy makers hinted at a possible pause in the two-year string of rate hikes if the economy shows signs of slowing down. Freddie Mac economist Frank Nothaft warned, however, that mortgage rates could rise again next week if reports on consumer and wholesale prices re-ignite concerns about inflation.

Fixed-rate, 15-year Florida home loans also fell this week, dropping to 6.17 percent from 6.22 percent last week. This mortgage option remains a very popular choice for consumers looking to refinance. Continuing the pattern, one-year adjustable rate mortgages slipped to 5.62 percent this week, down from 5.67 percent a week ago.

The only noteworthy gain came in the five-year, hybrid adjustable-rate mortgage market, which averaged 6.22 percent this week, up slightly from 6.21 percent last week. The Florida home loan rates quoted here do not include points. One-year ARMs carried a nationwide average of 0.7 points, while the other three home loan categories averaged 0.5 points.

For reference, 30-year Florida home loans averaged 5.77 percent a year ago, while 15-year mortgages stood at 5.33 percent, one-year ARMs were at 4.23 percent and five-year ARMs averaged just 5.21 percent. Higher Florida home loan costs are slowing home sales in the region this year after a record-setting five-year run. The status of the Florida housing market remains in flux, with varying views regarding its future among experts.