Mortgage Rates Fall For Fifth Straight Week as Home Sales, Market Forecasts Decline

As widely expected, Florida mortgage rates fell for a fifth straight week, according to the weekly survey released by mortgage finance company Freddie Mac. Data continues to point to a slowdown in the housing market and with the Federal Reserve easing its campaign against inflation, home loan costs have fallen off a bit since hitting four-year highs in April.

Thirty-year, fixed-rate Florida mortgages (the industry’s most common and benchmark loan) averaged 6.48 percent in the latest week, compared to 6.52 percent the previous week. The 6.48 percent average marks the lowest since 6.43 percent during the week ending April 6.

According to Freddie Mac, 15-year mortgages averaged 6.18 percent, also down slightly from a week ago, when they came in at 6.20 percent. As far as one-year adjustable rate mortgages (ARMs) are concerned, they averaged 5.60 percent, down a bit from last week’s 5.65 percent.

“The Fed (Federal Reserve) has acknowledged that it is closely monitoring the housing market as it slows down from last year’s record pace,” said Frank Nothaft, Freddie Mac’s V.P. and Chief economist, said in a statement.

“Although this fuels arguments about whether we will experience a soft landing or a bursting housing bubble, market watchers also perceive that it is possible that the Fed may stop raising short-term interest rates over the near term. This perception takes upward pressure off mortgage rates,” he continued.

Also yesterday, the Commerce Department said U.S. July new home sales fell 4.3 percent to an annual rate of 1.072 million units. Meanwhile, National Association of Realtors figured show July existing sales falling by 4.1 percent to to a 6.33 million unit pace in the U.S. as a while.

Although those declines confirm a slowing housing market, real estate experts we still expect 2006 to be the third-highest year on record in terms of total sales.

Lenders charged an average of 0.4 percent in fees and points on 30- and 15-year Florida home mortgage loans, both up from 0.3 percent last week. They charged 0.7 percent on the 1-year ARM, also up from 0.5 percent. The hybrid “5/1″ ARM, set at a fixed rate for five years, then adjustable each year following, averaged 6.14 percent, down from 6.18 percent last week.