Florida Mortgage Loan Costs Fall Again, Back to Levels Seen Earlier This Year
For the sixth straight week, Florida mortgage rates posted a decline, Freddie Mac’s weekly survey of lenders reports. The downward drift, which as brought rates down to the levels seen earlier this year, reflects the cooling of both the housing market and consumer confidence.
According to Frank Nothaft, Freddie Mac chief economist, the change “gives financial markets reason to believe that economic growth will moderate and inflation will remain in check.”
After five years of grossly disproportional growth, personal incomes are growing faster than the cost of housing, at least by some calculations.
Combined with low Florida mortgage borrowing costs, which are still, historically, at very manageable levels, this will help to support the housing industry as it levels off from the record highs of the last few years, experts say.
For the week, 30-year fixed-rate Florida home loans averaged 6.44 percent, down from last week’s 6.48 percent average, according to the results. The mortgage, considered the industry benchmark, is nearly 0.4 percent lower than when it hit its cyclical peak of 6.8 percent in July. The mortgages averaged just 5.71 percent a year ago.
Meanwhile, 15-year fixed-rate financing options averaged 6.14 percent, down from 6.18 percent a week earlier. This particular Florida mortgage loan product is at its lowest since April 6, and averaged 5.32 percent a year ago. It offers higher monthly payments, but less money spent on interest, than its 30-year counterpart.
Rates also declined among other home loan options, including those in which costs may reset after a certain period of time. Five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 6.11 percent for the week, down from 6.14. Hybrid ARMs are at their lowest levels since March 30.
One-year, Treasury-indexed adjustable-rate mortgages, by comparison, averaged 5.59 percent, down only slightly from last week’s 5.60 percent average. The ARM is at its lowest since April 6, while it averaged 4.48 percent a year ago.
As far as points are concerned, 30-year and 15-year fixed loans required an average of 0.4 points to obtain a quarter-point reduction in interest rates, while the five-year ARM required an average of 0.5 points, and the 1-year ARM required an average of 0.7 points.
Reports released on Wednesday indicate that Florida home mortgage loan applications fell during the week ending August 25. While traditional home purchase applications declined, applications among residents looking to refinance a Florida home loan rose.
