Florida Mortgage Applications Fall 3 Percent

Florida mortgage applications declined last week, in large part due to a four-week increase in home loan rates, an industry group said Wednesday.

The seasonally-adjusted index of total Florida mortgage applications fell 3 percent for the week ending October 27, and reached its lowest overall volume in over a month.

The cost of the 30-year fixed-rate mortgage (the most common type of home loan financing and considered the industry’s benchmark) have climbed up to 6.36 percent through October 20, having been as low as 6.18 percent in mid-September, the Mortgage Bankers Association said.

The Florida mortgage loan rates, which typically influence the application activity across the state, dropped to 6.24 percent this past week. Surveys gauging the rates offered by the state’s lenders are released later in the week, so it will be interesting to see where the rates go.

The four-week moving average for the overall mortgage applications index was 586.1, down 2.6 percent on the week but above levels reported during most of the second and third fiscal quarters of 2006.

Some analysts look at this data and conclude the housing market may be leveling out after rising Florida home loan rates and inventory levels cooled sales through the first half of the year, but not everyone concurs.

Other sub-indexes show that any stability in the Florida housing market are tenuous at best. The index of home purchases declined 1.8 percent to 375.6, the lowest level of the current downturn. The gauge of home mortgage refinancing fell 4.5 percent to 1,709.2.

The slide in sales of existing homes, which represent some three-quarters of the market, had not subsided as of September in Florida or beyond.

The pace of U.S. existing home sales slowed for a sixth straight month in September, the National Association of Realtors reports, to an annual rate of 6.18 million units. That’s a decline from the 6.30 million pace posted by the group in August.

Sales of new homes unexpectedly jumped a second straight month in September as home builders slashed prices, and began offering incentives to lure more buyers.

But many observers speculate that the market will continue to slide through 2007 and may not return to its past form until at least 2008.