Florida Home Loan Rates Inch Up Slightly; Mortgage Refinancing Activity Surges
Long-term Florida mortgage rates inched up just a little this week, but people are beginning to notice what has happened to rates over the course of the last three months.
The benchmark 30-year, fixed-rate Florida mortgage costs rose 0.02 percent to 6.31 percent, according to a Bankrate.com survey of large lenders.
The mortgages in this survey had an average total of 0.31 points. One year ago at this time, the mortgage index was 6.07 percent; four weeks ago, it was 6.45 percent; three months ago, it was upwards of 6.75 percent.
As you can see, it’s been a mercurial year for mortgage rates. The 15-year fixed-rate mortgage, which crept up 0.04 percent this week to an even 6 percent, is no exception. The 5/1 adjustable-rate mortgage, meanwhile, dropped 0.01 percent to 6.06 percent.
A “YES, BUT…” KIND OF WEEK
The small rises in fixed-rate mortgages and small falls in adjustable-rate mortgages were symptomatic of market that lacked direction early this week.
Speculation is running rampant, but analyses are mixed. Big stocks hit record highs, but other prominent economic indexes didn’t. It was a week in which very little about the long-range direction of the housing market — and the U.S. economy as a whole — could be gleaned.
According to Briefing.com’s survey of economists, the consensus is that the September unemployment rate will stay unchanged at 4.7 percent, and that non-farm payrolls have grown by more than 120,000 jobs.
That wouldn’t be an impressive pace of job growth, but on the flip side, it wouldn’t be terrible, either. If the report says the U.S. economy grew by 150,000 or more jobs, the rates of Florida mortgage loans would be likely to rise late this week and early next week.
The 30-year fixed-rate home loan peaked at 6.93 percent on June 28, and has run mostly downhill since. Over the last 14 weeks, home loan rates have fallen a total of 10 times, while they have remained the same once and risen three times.
When you add those three upward blips together, including this week, they total 0.05 percent. Rates have followed a long, steady downward slope, spurring hope among many in the industry that new buyers will be lured back into the market.
FINALLY, THE REFI SURGE
It took a long time for homeowners to recognize the downward trend in rates. As rates fell week after week, lenders hoped for a small refinancing boom. Yet instead of a boom like a firecracker, they got more like a pop when you snap a forefinger out of your mouth.
Until last week. That’s when refinance volume jumped a whopping 17.5 percent, according to the Mortgage Bankers Association.
Some 46.7 percent of applicants were homeowners who wished to refinance their Florida home loans. The refinance share hadn’t been that high in 19 months. Many economists attribute the mini-boom to the drop in interest rates. But there’s more to it than that. What we are seeing is an opportunity for homeowners to refinance and get away from adjustable-rate loans in favor of more secure fixed-rate loans.
“With long-term rates having fallen far and fast in recent weeks, a new refinance boom is well underway,” says Bob Walters, chief economist for Quicken Loans. “We’ve seen an increase in homeowners refinancing out of adjustable-rate mortgages on the verge of them resetting and out of fixed-rate mortgages that are in the mid- to high-6 percent range.”
