Florida Mortgage Rates Hold Steady

The factors influencing home loan borrowing costs often cancel each other out. An optimistic employment report was balanced out by the return of Democrats to power in Washington, leaving Florida home mortgage rates pretty much unchanged over the past week.

The 30-year fixed-rate mortgage, considered the industry’s benchmark, rose by 0.01 percent to 6.32 percent, according to a survey of large lenders.

The mortgages in this week’s survey had an average total of 0.26 points. A year ago, the fixed-rate loan index came in at 6.42 percent, and four weeks ago, it was also 6.42 percent. Fixed-rate mortgages are starting to come back into favor after the surge in popularity of interest-only loans over the past few years.

The 15-year fixed-rate mortgage was unchanged at 6.02 percent, while the 5/1 adjustable-rate mortgage (ARM) rose 0.03 percent to 6.16 percent.

The 1-year ARM fell by 0.01 percent to 5.91 percent.

Mortgage rates were about the only thing that didn’t change much from week to week. There was a hefty surge in Florida mortgage applications, plus an October jobs report sitting on one end and the weighty election results sitting on the other. Florida elected a new governor, and control of both houses of U.S. Congress changed hands, leading to much economic speculation.

In the past week, Florida home loan applications jumped 8.8 percent, led by a big increase in refinance activity. Almost half of mortgage applications were for refinances last week, and more than 25 percent of total applicants requested an adjustable-rate mortgage (ARM). All this even as home builder profits have declined considerably.

The surge in applications followed a big drop in home mortgage rates the previous week, as owners angled to take great advantage of a strong Florida mortgage refinancing opportunity and new buyers looked to capitalize on what could be a temporary drop in costs.

Below is a chart of projected Florida mortgage rates between now and the end of 2008, compiled by the Mortgage Bankers Association. While this is only guesswork conducted by a group of analysts, it’s interesting to see how they predict rates will behave in the next 26 months — and what they’ve done lately.