Florida Home Loan Applications Fall Despite Lower Mortgage Interest Rates

Florida mortgage applications dropped in the last week, showing weaker home loan demand even as the state’s mortgage rates fell slightly.

The Mortgage Bankers Association said in its seasonally adjusted index of mortgage application activity, which includes both refinance activity and home loans, that demand dipped 0.2 percent to 630.1 for the week ending February 2.

The four-week moving average of Florida mortgage applications, which tracks trends better than the volatile weekly figures, was down 1.6 percent.

Borrowing costs on 30-year fixed-rate mortgages, excluding points, averaged 6.23 percent, down 0.06 percent from the previous week.

It was the 30-year mortgage rates’ first drop since early January. Last week’s mortgage rates were slightly below year-ago levels of 6.25 percent.

The MBA’s seasonally adjusted purchase index, widely considered a timely gauge of home sales, fell 0.8 percent to 404.7. The index was also below its year-ago level of 425.1.

Residents considering a Florida mortgage refinancing for their current loans tend to be sensitive to shifts in interest rate moves, which may have been the result of last week’s rise in demand for this type of transaction.

The group’s seasonally adjusted index of refinancing applications increased 0.2 percent to 1,943.4. A year earlier the index stood at 1,751.0.

The share of loan applications dedicated only to Florida mortgage refinancing decreased to 46.1 percent from 47.4 percent the previous week.

Fixed 15-year mortgage rates, a popular choice for refinancing, averaged 5.96 percent, down from 6.01 percent. Rates on one-year adjustable-rate Florida mortgage loans (ARMs) fell to 5.84 percent from 5.86 percent.

The ARM share of activity increased to 22.3 percent from 21.4 percent the previous week. A bevy of recent data has shown improvement in the sector, giving home to the Florida housing market after a difficult 2006. The inventory of homes for sale, combined with low rates, have prospective home buyers in the driver’s seat.