Refinancing, Home Loan Applications Falling

Applications fell for Florida home loans and mortgages throughout the U.S. last week as demand for home financing continues to sputter, Reuters reported yesterday.

According to the Mortgage Bankers Association, refinancing activity dropped to its lowest this year, as gauged by the trade group’s seasonally adjusted index. Overall mortgage application activity for the week ending June 2 saw a decrease of 1.4 percent, to 534.4 from the previous week’s 541.9.

Borrowing costs on 30-year fixed-rate Florida home loans, excluding points, averaged 6.60 percent, down 0.06 from the previous week. Lower rates have not been enough to lure a greater quantity of potential borrowers, however, at least not in recent weeks.

The MBA’s seasonally adjusted purchase mortgage index was nearly unchanged at 395.6. However, it was substantially below its year-ago level of 479.3.

The purchase index is considered an accurate and timely gauge of U.S. home sales. The group’s seasonally adjusted index of refinancing applications decreased 3.8 percent to 1,356.0, its lowest level since the week ended December 30, 2005, when it reached 1,363.2. Aside from a brief dip back in December, refinancing is at its lowest since April 2002.

Whether or not there is a full-fledged housing bubble, the cooling of the market is becoming quite clear. Many prospective buyers are taking their time making an offer these days, while others are priced out altogether by the higher rates. Florida home mortgage loan activity is at a particularly vulnerable point right now, and we will continue to monitor it to the best of our ability.