Florida Home Mortgage Loan Rates Inch Higher, Reach Four-Year High Once Again
After dipping slightly the previous week, Freddie Mac reports that mortgage rates rose slightly to 6.60 percent, marking the highest average rate in nearly four years. The prior week’s Florida home loan average was 6.58 percent. One year ago, 30-year fixed-rate Florida home loans averaged 5.71 percent at the peak of the housing boom.
Rates haven’t been higher since June 2002 (6.63 percent).
“While financial markets try to decipher the spate of recently released economic reports, mortgage rates drifted slightly higher. The current debate is between rising inflation and slower consumer spending. Until the market finds out which influence will be the strongest, mortgage rates should continue to fluctuate as they have the last couple weeks,” Frank Nothaft, Freddie Mac V.P. and Chief Economist, said.
The average rate on 15-year fixed-rate home loans edged up to 6.20 percent from 6.17 percent a week ago. A year ago, those loans averaged just 5.27 percent. Five-year adjustable-rate mortgages averaged 6.23 percent, up a slight 0.01 percent from last week. The average one-year adjustable-rate mortgage (ARM) remained at 5.62 percent. At this time last year, the nation’s one-year adjustable loans averaged a scant 4.26 percent.
In spite of this week’s stability, all rates are steadily rising for the year. For homeowners using adjustable rate mortgages (ARMs), a consistent rise in interest rates can mean ballooning payments.
The Mortgage Bankers Association estimates that some $330 billion worth of ARMs will adjust in 2006 and $1 trillion worth will reset by the end of 2007. For instance, a $200,000 loan adjusting upward from 4 percent to 6 percent would push the monthly bill up to about $1,200 from $955.
Be sure you keep this in mind if you go Florida home loan hunting this spring. The standard 30-year fixed-rate loans are on the rise, but those rates are still historically low. Watch out for non-traditional and long-term options with which you earn little to know equity, and take note of the current Florida housing market conditions near you. Another important factor will be your credit, so be sure that you receive your credit report from the right source!
