Florida Refinance, Home Purchase Loan Applications Rise For Third Straight Week
Home loan applications rose across the state for the third straight week, driven by demand for both purchase and Florida refinance activity.
The Mortgage Bankers Association said its seasonally adjusted applications index increased 3.6 percent in the week ended May 4 to 680.7, its highest level since 690.5, on March 9.
Average 30-year fixed-rate Florida mortgage costs, not counting fees, fell 0.04 percent to 6.10 percent, their lowest since they hit 6.04 percent in the week ending March 23.
Long-term mortgage rates have fallen about half a percentage point from a year ago, making this a great time for first-time buyers.
The MBA’s seasonally adjusted purchase index rose 2.6 percent to 438.3, its highest level since 439.7 in the week ended January 12.
The group’s seasonally adjusted Florida mortgage refinancing index showed applications up 4.9 percent to 2,115.2, also a peak since March 23.
Some economists contend that the typically close tie between Florida mortgage applications and home sales may have become disconnected.
Lenders have become more restrictive in offering mortgage loans as foreclosures have mounted due to widespread problems with subprime (bad credit Florida mortgage) loans made to borrowers with blemished credit.
So while applications may be on the rise, rejections may also be climbing.
“It remains to be seen if the tightening of lending standards and consumer fears of losing money on home purchases mean sales will fall short of the levels implied by the historic relationship with applications,” said Ian Shepherdson, chief economist at High Frequency Economics in Valhalla, N.Y.
The National Association of Realtors on Tuesday cut its home price forecast for the third consecutive month, citing stricter lending practices and a drop in bad credit mortgage creation.
Existing home sales will total 6.29 million this year, down from 6.48 million last year and below the April estimate of 6.34 million.
Nationally, the median price of existing homes, which represent 85 percent of the housing market, will likely slide 1 percent in 2007 in the first drop in the Realtors nearly 40 years of record keeping.
SOURCE: Reuters
