Florida Mortgage - Are the current market trends favorable for you?Mortgage rate overview..The Florida market currently reflects the nationwide drop down in mortgage rates - that of the common fixed rate loan options like 15 year fixed, 30 year fixed and the 1 year ARMs. However, the 5/1 year hybrid ARMs are slightly up by a few basis points and are currently on an upward trend. Average mortgage rates this week 15 Year FRM 6.55% 30 Year FRM 6.83% 1 Year ARM 6.69% The statewide 15 year mortgage rates that have been above 6% have dropped down to even below 6%. The 30 year rates have somehow managed to stay above 6% but declined slightly from the previous value. This is due to the stock market pushing long term rates lower as the 10 year Treasury note yields dropped. The 30 year fixed rate mortgage continues to be Florida’s most common home loan. Besides, Hybrid ARMs and interest-only options are quite popular these days. {include file=”components/searchlenders-instatepage.tpl” StateID=12} Subprime market and how it can affect youThere are concerns about the subprime mortgage market, which has been in trouble nationwide since quite some time. This has affected the secondary market where big companies like the Freddie Mac have refused to buy subprime loans till the end of September. The company has also declared that borrowers going for non-subprime loans will need to qualify at the fully-indexed rate and not the low introductory rate in order to take out adjustable rate mortgages.However, qualifying a borrower with a certain income against a higher rate does not imply that he will not get the loan. But then there are chances that the borrower qualifying for a certain loan amount at the ARM introductory rate may be offered a lower amount in comparison if he has to qualify at the fully indexed rate (higher than introductory rate). This is likely to lessen the demand for homes and that’s not so good news for the housing market which needs more stabilization.However, the expected decline in new home sales can be balanced by slow down in long term rates which are expected to be at low levels as that will help in refinancing. So, A credit borrowers having signed the deal for an ARM can avoid payment shock after a certain number of payments.Despite the delinquencies and defaults in the subprime mortgage industry, it is expected that over 80% of the market would be involved with A credit and the rest 20% would account for the subprime loans. A considerable percentage of borrowers out of the 20% is in some stage of delinquency and cannot get through on account of low equity built up and rising monthly payments. The primary reason behind this is stumbling home prices, which have made it difficult to refinance loans or sell properties to pay down debts.Trends in Florida housing marketThe housing market in Florida reflects the national trends - slower home sales compared to what it has been last year around this time. However, prices of single family homes have remained steady even with inflation suggesting that there is some kind of stability in the housing market. Since single family housing is the area where most lending transactions happen, therefore the market looks good for investment into single family properties. However, not all markets are progressive. Jacksonville has a slow and steady market compared to Orlando, Tampa, St. Petersburg, Miami and other cities in South Florida.Economy and Florida mortgage rates forecastThe Federal Reserve has kept the Fed Funds Rate almost steady in order to check inflation. However, Consumer price Index has gone up thereby showing signs of higher inflation and hence the Fed is expected not to cut down rates but rather hold them steady. The economy is going through slower growth and this will keep mortgage rates at lower levels. This will find its reflection in the state of Florida too.

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