Florida Mortgage Loan Rates Up Again; Good and Bad News For Potential Applicants

For home shoppers and potential Florida mortgage applicants, there’s good news and bad news this week.

The good news? Home prices continue to fall. The bad news? Florida mortgage rates are rising, albeit modestly.

The 30-year fixed-rate mortgage, the industry’s benchmark home loan, rose for the third time in four weeks, rising .04 percent to 6.46 percent, the Bankrate.com national survey of large lenders concluded.

The Florida mortgage costs in this week’s survey averaged a total of 0.35 origination points. A year ago, the mortgage loan averaged 6.24 percent. Four weeks ago, it was 6.29 percent. It has shot up by .17 percent in a little over a month.

The 15-year, fixed-rate Florida mortgage loan rose .06 percent to a 6.16 percent average to end the week. The 5/1 adjustable-rate mortgage (ARM) went up .04 percent to 6.28 percent.

As mortgage rates rise, house prices fall. Realtors say existing home sales fell 1.9 percent in September compared to August. Of the houses that were sold in September, half cost more than $220,000, compared with a median prices a year earlier of $225,000 — a price drop of 2.2 percent.

Further, putting smiles on home shoppers’ faces was the Federal Reserve’s decision to keep short-term rates steady for the second straight meeting. While Florida home loan rates don’t directly depend on the Fed’s moves, the U.S. central bank’s decision has a strong influence — and in this case, a calming effect.

Doug Duncan, chief economist for the Mortgage Bankers Association, predicts that fixed mortgage rates will rise, but slowly. His forecast calls for the 30-year fixed-rate mortgage to fall somewhere between 6.5-6.75 percent at the end of 2007. That’s just slightly above today’s average — about a quarter of a percentage point higher.