Florida Mortgage Applications Increase; Low Borrowing Costs Spark 11.4 Percent Surge

Applications for Florida home mortgages rose to their highest levels in over a year last week as home purchases and home equity loan refinancing continued to rebound, the Mortgage Bankers Association reports Wednesday.

The seasonally-adjusted index of total Florida mortgage applications rose 11.4 percent in the week ending December 8, reaching 721.2 on the index, the highest level since October 2005.. The four-week moving average for the applications index rose by 2.9 percent to 647.9.

The main reason for the surge in applications in spite of sky-high home prices that are giving buyers pause is the continually low Florida home loan rates, which remain advantageous for many buyers.

Long-term, 30-year fixed-rate home loans - the most common mortgage option and considered the industry benchmark - averaged just 6.02 percent in the week ending December 8.

In the week ending December 1, 30-year home mortgage rates sank to just 5.98 percent, the lowest level since October 2005. Many believe this will spur a rare late-year rebound in the state’s slumping housing market.

“The substantial decline in mortgage rates over the last six months, greater than 80 basis points (0.8 percent) in total, has led to a significant increase in refinance activity,” Mike Fratantoni, senior economist at the MBA, said in a statement.

The MBA’s measure of conventional and Florida home equity loan refinancing jumped 15.8 percent to 2,304.4, signaling that homeowners were seeking new loans at the fastest pace since September 2005, the group said.

Its index measuring Florida mortgage loans earmarked strictly for home purchases rose 8.7 percent to 463.8, the highest since January.