Florida Mortgage Applications Rise Despite Higher Rates

Florida mortgage applications rose last week, fueled by increased demand for home purchase loans even as interest rates hit their highest level in nearly a year.

The Mortgage Bankers Association’s seasonally adjusted index of home loan applications, which includes both home purchase loans and Florida mortgage refinancing, increased 1.1 percent to 626.2 for the week.

Overall, the four-week moving average of Florida mortgage applications, a better gauge of trends than the more volatile weekly figures, is down by 1.6 percent.

Borrowing costs on 30-year fixed-rate Florida mortgages, excluding fees, averaged 6.65 percent, up 0.15 percent, the highest since the week ended July 21, 2006 (6.69 percent).

The rise in demand for loans to buy homes last week offset lower Florida mortgage refinance activity.

The MBA’s seasonally adjusted purchase index, widely considered a timely gauge of home sales, rose 3.8 percent to 453.9. The index was above its reading a year earlier at 425.0.

The seasonally adjusted index of Florida home mortgage refinancing applications decreased 3.0 percent to 1,636.9, its lowest since December 2006.

The Florida refinance share of applications in the Sunshine State decreased to 36.2 percent from 37.8 percent the previous week.

Fixed 15-year mortgage rates, a popular option for those considering home loan refinancing, averaged 6.31 percent, up from 6.20 percent.

Rates on one-year adjustable-rate mortgages (ARMs), meanwhile, increased to 5.60 percent from 5.49 percent.

Florida mortgage lenders reported that the ARM share of home loan activity decreased to 20.4 percent from 21.0 percent the previous week.

SOURCE: Reuters