Florida Mortgage Applications, Refinancings Rise

Florida mortgage applications rebounded last week after two back-to-back declines as conventional home purchases and refinancing both increased.

The Mortgage Bankers Association index of applications for home loans, or to refinance home loans, rose 3.6 percent. On their own, Florida home loan applications jumped 4.3 percent, while the refinancing rose 2.2 percent.

The report reinforces last week’s findings that showed more sales of new and previously owned homes in November, suggesting the worst of the slump is over. Cheaper homes, lower Florida mortgage rates and incentives will gradually lure buyers back into the market as 2007 dawns.

The home purchase loan is up 8.3 percent from a three-year low reached at the end of October. A year earlier, the index registered approximately 5 percent higher than it it now.

The Florida mortgage refinancing index rose to 1640.4 last week from 1604.6 the week before, coming in 20 percent higher than a year earlier, which may be explained by more people shunning adjustable-rate loans and opting for products featuring fixed rates.

The number of adjustable-rate mortgages fell to 20.4 percent last week, the lowest since July 2003, from 23.1 percent.

The number of unsold homes, compared with the pace of sales, is starting to ease in Florida and across the nation. The supply of homes at the current sales rate slipped in November. Some home builders are resorting to price cuts and various incentives in order to move inventory.

Today’s report showed that Florida mortgage loan rates are averaging 6.22 percent, their highest in nine weeks, up from 6.12 percent last week.

Under those mortgage rates, borrowing costs for each $100,000 of a Florida home loan would be $613.77 a month. A calculator puts that cost at $42 less than in the week ending June 23, when the rate was 6.86 percent - which at the time was a four-year high.

The rate on a 15-year mortgage climbed to 5.93 percent from 5.84 percent. The rate on a one-year ARM declined to 5.84 percent from 5.87 percent.

Higher rates in recent weeks may have been discouraging refinancing of loans, which spiked late last year. The share of home mortgage applications devoted to refinancing slipped to 48.1 percent from 48.8 percent.