Residential Construction Slows Down, Florida Mortgage Loan Refinancing Picks Up

With the housing market playing a less significant role in the economy, local builders are reacting accordingly. According to the U.S. Census Bureau’s “New Residential Construction” report for June 2006, new housing permit issuances dropped 4.3% from May to June.

In tandem with slowing real estate metrics, the Federal Deposit Insurance Corp. issued a recent statement indicating it expects mortgage delinquencies to increase over the next few years, particularly for interest only and adjustable rate Florida home mortgage loans.

Despite these disappointing indicators, most real estate and mortgage companies, even in the hottest growth markets, foresee an ongoing growth trend more inline with traditional growth patterns.

“While the market has been explosive over the last few years, we are seeing a general overreaction to market slowdowns,” said Nabil Dajani, President of Orlando based brokerage firm Homestar Funding. “Many homeowners have had significant equity growth in their homes. With 30-year rates still at relative lows, many homeowners are looking to [Florida home loan refinance] and convert existing ARMs to a more stable fixed rate.”

As investors and speculators begin to withdraw from the market, some experts are concerned about an overload of excess inventory. However, the status of Florida mortgage rates will play a prominent role in the immediate future of the industry.

“If we don’t see any significant hike in interest rates by the Federal Reserve, the retreat of speculative investors should be less pronounced,” said David Bayer, president of
www.PersonalHomeLoanMortgages.com.

A combination of high inventory and high rates could drive some investors to unload properties below market values, which could have a downward driving effect on the industry as a whole. It would certainly benefit those with a low or moderate seeking a Florida mortgage loan and new house, however.

“Investors who moved into the market too late and overextended themselves may find themselves in a tight position. As a whole, most non-speculative homeowners have been able to enjoy low rates and equity growth. Things just seem to be settling back to ‘normal’.”

This should be good news for owners and buyers alike.