Florida Mortgage Rates Rise Another 0.05%

The nation’s mortgage lenders are concerned, and uncertain, about what the Federal Reserve will do next. As a result, Florida home loan rates rose again this week, according to Freddie Mac’s weekly survey.

Rates on 30-year, fixed-rate Florida mortgage rates averaged 6.67 percent, up 0.05 percent from last week’s 6.62 percent and the highest since June 13, 2002, when the 30-year industry benchmark loans were at 6.71 percent. One-year adjustable rate mortgages, meanwhile, hit their highest level in nearly five years.

One-year ARMs jumped up to 5.68 percent, nearly hitting their highest point since mid-August 2001, when they averaged 5.71 nationally. Last week, the one-year ARM was at 5.61 percent. As a result of rising rates, the market, which has enjoyed five straight boom years, is exhibiting numerous signs of slowing, stirring up a lot of housing bubble talk.

The latest evidence came Thursday with a government report stating that residential construction spending dropped by 1.1 percent in April, a drop bigger than any in the past two years. Meanwhile, a National Association of Realtors report showed pending home sales falling for a third consecutive month.

Analysts believe the Florida real estate will experience gradual cooling this year, but will not crash, assuming the Fed calls off its two-year campaign to push interest rates higher in an effort to curb inflation under control. However, financial markets worry that the Fed, which has already boosted interest rates 16 straight times, may keep doing so in response to inflation pressure, rather than pausing as it had hoped.

Frank Nothaft, Freddie Mac’s chief economist, believes mortgage rates will rise only slightly higher for the rest of 2006, and that the increase will be gradual.

Rates on 15-year, fixed-rate mortgages, a popular choice for Florida home loan refinance, also rose this week, averaging 6.26 percent, up from 6.23 percent the previous week. Rates on five-year ARMs also rose to 6.26 percent from 6.21 percent last week.

The mortgage rates listed above do not include origination or “add-on” fees known as points. Nationally, 30-year and 15-year mortgages carried 0.4 points on average, while one-year ARMs averaged 0.7 points and the five-year ARMs carried an average fee of 0.5 points.

Oh, how the Fed has altered the Florida home mortgage loan landscape. A year ago, 30-year mortgages averaged just 5.62 percent, 15-year mortgages stood at 5.20 percent, one-year ARMs were at 4.26 percent and five-year ARMs averaged 5.10 percent. Then again, as rates have risen, home prices have slowed, if not stalled, giving buyers hope as they look to enter a torrid South Florida housing market.