Florida Mortgage Applications Surge; Residents Refinance to Capitalize On Low Rates

It appears the Florida home loan market is alive and well.

At least as far as refinancing is concerned.

Data shows mortgage applications rose sharply last week, fueled largely by a surge in refinancing as home mortgage rates sunk back to their lowest levels in more than a year.

The Mortgage Bankers Association reported Wednesday that its seasonally adjusted index of home loan application activity for the week ending December 1 increased 8.1 percent to 647.6 from last week’s 599.

Borrowing costs on a 30-year, fixed-rate Florida mortgage, excluding fees, averaged just 5.98 percent, down 0.15 percentage point from the previous week, the lowest since the week ending October 7, 2005, when it stood at the same level. Rates were also below earlier levels of 6.32 percent.

That decline in home loan rates was enough to spur a decline in Florida home loan refinancing from residents looking to get out from under risky ARMs and lock in on good rates for low fixed-rate loans. The index of mortgage refinancing surged an impressive 13.7 percent last week.

Expect these mortgage refinancing trends to continue if rates remain this low. More and more residents will be looking to shed the burden of Florida home loans that involve fluctuating rates, and these low fixed rates offer the perfect opportunity to achieve greater security.

The group’s seasonally adjusted purchase index rose 4.9 percent to 426.6, its highest since May. However, the week’s purchase index reading was substantially below its year-ago level of 495.1.

In the previous week, mortgage applications declined modestly, in large part due to a shorter business week and the Thanksgiving holiday.

The group’s index is considered to be a timely gauge of home sales, in Florida and across the U.S., which have lagged considerably this year after five straight record years.