Florida Home Loan Rates Bounce Back Up
After two weeks of holding steady or declining, the average rates of 30-year, fixed-rate Florida home loans bounced back this week, once again threatening their four-year high.
Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages (the industry’s most common loan option) increased to an average of 6.80 percent, up 0.06 percent from the 6.74 average posted a week ago. The increase pushed the rates to their highest level since they stood at 6.81 percent on May 24, 2002.
In the previous few years, historically low mortgage rates powered a boom in housing which elevated sales of both new and existing homes to record levels. For five consecutive years, sales pinnacles were surpassed. But as rates have crept up this year, sales have slowed considerably, particularly in once-booming sectors such as the South Florida housing market.
Some economists have expressed fears that the housing boom could quickly turn into a bust with sales and prices both falling sharply. But Federal Reserve Chairman Ben Bernanke told Congress Thursday that the housing slowdown “appears to be orderly” so far. Bernanke added that the Fed recognizes the potentially severe impact of a slowdown in housing, and assured Congress that the U.S. central bank is keeping careful watch.
The rise in mortgage rates is closely related to further increases in, and concerns regarding inflation, including a 0.3 percent increase as measured by the consumer price index, which tracks core inflation.
Rates on 15-year, fixed-rate mortgages, a popular choice for Florida home loan refinancing, increased to 6.41 percent, up 0.04 from a week ago. One-year adjustable rate mortgages rose to 5.80 percent, up from 5.75 percent last week, while rates on five-year adjustable-rate mortgages increased to an average of 6.36 percent. Last week they stood at 6.33 percent.
The Florida home loan rates above do not include points. The 30-year and five-year mortgages carried an average of 0.5 points, while the 15-year mortgages had an average of 0.4 points. One-year ARMs carried fees of 0.6 point on average. A year ago, 30-year fixed-rate mortgages averaged 5.73 percent, 15-year mortgages stood at 5.32 percent, one-year ARMs were at 4.42 percent and five-year ARMs could be found for 5.26 percent.
