Florida Mortgage Rates Creep Up Slightly

Rates on 30-year Florida mortgages, having fallen steadily for a month, edged up slightly this week, but remain well below the levels of a year ago.

Throughout the state, the benchmark 30-year, fixed-rate Florida mortgage averaged a 6.12 percent rate throughout the state, up from 6.11 percent a week ago.

Last week’s rate had represented the lowest level this year except for the week of January 19, when the 30-year mortgage dipped to 6.10 percent. One year ago, the rate was 6.30 percent.

All Florida home loan rates except the five-year ARM showed slight gains this week, a fact that experts attribute to conflicting signals from the economy.

“Mixed economic reports have kept mortgage rates from making any drastic changes this week,” said Frank Nothaft, chief economist at Freddie Mac.

The nation’s biggest buyer of mortgages on the secondary market said that the government reported stronger-than-expected job growth and home sales for November but that wage growth and consumer sentiment were both weaker.

On Tuesday, the Federal Reserve voted to keep the nation’s key interest rates unchanged at its final meeting of the year, as many experts expected. That helped keep home mortgage rates more or less in check.

Many economists believe the Federal Reserve, which last changed rates in June, will remain on hold until May or June 2007, as the U.S. Central bank hopes that the 17 rate hikes they already have approved will be enough to achieve a soft landing in which a slowing economy cools inflation without triggering any sort of recession.

Experts believe that long-term Florida home loan rates will rise in coming months, but at a gradual pace. He said the 30-year mortgage most likely will not reach 7 percent, with the low-moderate rates expected to help foster a rebound in the slumping housing market.

After five years in which sales of both new and existing homes climbed to successive highs, the Florida housing market has cooled considerably this year. Sales have fallen and builders have been scrambling to cut back on construction to deal with record levels of unsold homes.

Rates on 15-year, fixed-rate mortgages averaged 5.86 percent this week, up from 5.84 percent last week, while the rates of one-year ARMs edged up from 5.42 percent to 5.45 percent. The five-year ARM ended the tumultuous week right where it began, at just 5.92 percent.