Florida Mortgage Applications Soar to Start ‘07

Florida mortgage applications boomed during the first week of 2007 as the rates of home loans declined for the first time in five weeks and Sunshine State residents looked to capitalize on favorable borrowing conditions.

The burst of application activity is seen as lending support to the view that the housing market is stabilizing after its fall from grace in 2006.

In its seasonally adjusted index of Florida mortgage application activity, the Mortgage Bankers Association said that both home loans and home loan refinancing requests rose 16.6 percent for the week ending January 5.

Borrowing costs on 30-year fixed-rate mortgages, the most common option for those seeking a Florida mortgage loan, averaged 6.13 percent, excluding fees or points. That’s a drop of 0.09 percent from the previous week.

Those Florida mortgage rates compare almost identically to the year-ago levels of 6.08 percent.

The organization’s seasonally adjusted purchase index of conventional mortgage applications rose by 16.2 percent to 472.8, its highest since the week ended January 20, 2006, when it reached 473.7.

The index was also above its year-ago level of 457.4, when applications were starting to tail off after five years of record gains. This year, industry officials are hopeful that the market will bounce back, at least to some degree.

The index is considered a timely gauge of home sales, which tumbled significantly last year after five consecutive years of record growth. Experts are predicting a more normal market in 2007, but still a buyer’s market, at least in the interim, and most likely nowhere close to a return to the boom years of the first half of the decade.

That’s wishful thinking. Some areas, such as the Naples housing market and much of South Florida, remain overvalued and loaded with inventory.

Conventional Florida home loans aside, the MBAA’s seasonally adjusted index of home loan and Florida home equity loan refinancing applications surged 17.3 percent as more people look to trade in their ARMs for more secure financing products and capitalize on low, fixed rates.