Florida Home Mortgage Applications Slip as Rates Rise, Refinancing Activity Slows

Florida mortgage applications slumped over the past week, weighed down by a drop in demand for home loan refinancing, the Mortgage Bankers Association said. This index of Florida mortgage activity is seasonally-adjusted and for the week ending December 15.

The index decreased 10.2 by percent to 647.6 from the previous week’s 721.2, which was the highest level recorded in over a year. A rise in home loan rates cooled the demand for Florida mortgage refinancing, which had boosted applications by over 10 percent the week prior.

Borrowing costs on 30-year fixed-rate mortgages (the industry’s benchmark loan), excluding fees, averaged 6.10 percent, up 0.08 percent from the previous week.

Two weeks prior, 30-year mortgage rates fell to 5.98 percent, the lowest level registered since back in October 2005, when the record housing boom was just about ready to cool off.

Meanwhile, the MBAA’s seasonally adjusted index of conventional mortgage and Florida home equity loan refinancing applications decreased by 14.6 percent to 1,968.8.

The MBA’s seasonally adjusted home purchase index, which tracks loans designed to buy, not refinance homes, fell 5.9 percent to 436.5. The index was also below its year-ago level of 453.1.

The group’s purchase index is considered a timely gauge of sales, which have fallen off considerably so far this year, especially in South Florida, after five years of record growth. Expect applications to remain low this week, due in large part to the holiday season.