Florida Home Loan Rates Fall Substantially, Spark Confusion Among Economists

Florida mortgage rates dropped considerably this week, even if analysts are baffled by that fact, and consumers aren’t rushing to take advantage of it.

Even after it was reported that Florida mortgage applications fell by 3.3 percent over the past week and are now 11.2 percent lower than the same week last year, rates are rushing downhill, and conventional wisdom would suggest that would spark more demand.

The benchmark 30-year, fixed-rate mortgage fell a significant 0.15 percent to 6.31 percent, according to a survey of large lenders. The mortgages in this week’s survey had an average total of 0.25 origination points.

One year ago, mortgage rates for 30-year loans came in at 6.37 percent; four weeks ago, the rates were right where they are now, at 6.31 percent.

• The 15-year, fixed-rate mortgage fell 0.14 percent to 6.02 percent.
• The 5/1 adjustable-rate mortgage (ARM) fell 0.15 percent to 6.13 percent.

It’s puzzling to some economists why Florida mortgage loan costs are on the decline at the same time economic reports seemed to be signaling that the economy is experiecing trouble.

Factory orders fell, construction spending was down and an index of future home sales showed that sellers will continue to have reasons to weep. When it looks like the economy is about to slow down, long-term interest rates tend to fall. But at the same time, the stock market is booming, energy prices are down, and consumer confidence is up.

So perhaps no one knows just what to make of this.

All of this bears watching as experts’ predictions regarding the state of the housing market vary. Most say they do not expect serious movement in Florida home mortgage rates between now and the end of 2007. All you can do, as a potential buyer, is stay tuned to the current trends and talk to the experts who can get you the best deal.