Florida Mortgage Loan Applications Decline Again

Florida home loan applications fell for a second straight week, reflecting a drop in demand for home purchases and refinancing even as mortgage interest rates sank, an industry group said Wednesday.

The Mortgage Bankers Association said its index of mortgage applications, which includes both purchase and Florida mortgage refinancing activity, decreased 4.0 percent in the week ending August 24.

Florida home loan applications, however, were 10.5 percent above their year-ago level.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.41 percent, down 0.08 percent from the previous week.

Florida mortgage rates were above year-ago levels at 6.39 percent.

The four-week moving average of mortgage applications, which smooths out the volatile weekly figures, was up 0.3 percent.

A sharp rise in defaults in the bad credit Florida mortgage sector, which caters to borrowers with poor credit, has caused lenders to tighten their requirements for all buyers, making it more difficult for those with weak credit (or even average credit) to get a home loan.

The MBA’s seasonally adjusted purchase index fell 4.0 percent, however, the index is up more than 12 percent from this time a year ago.

The group’s seasonally adjusted index of refinancing applications dropped 4.2 percent, similarly, but is up 7.5 percent from a year ago.

The Florida refinance share of applications increased to 40.4 percent from 39.9 percent the previous week.

Fixed 15-year mortgage rates averaged 6.10 percent, down from 6.20 percent. Rates on one-year adjustable-rate mortgages (ARMs) increased to 6.51 percent from 5.84 percent.

The ARM share of Florida mortgage activity decreased to 15.0 percent, down from 18.6 percent the previous week.

SOURCE: Reuters