Prices Dropping, Rates Rising: Is Now the Time to Refinance?

By Gabriel Traverso
Local Lender Columnist
Apr 30, 2007
Florida homeowners with a mind to refinance might be watching the local market prices with some dismay--some experts predict prices to fall--but the overall outlook for values is still good and now is a great time to refinance.

The Mortgage News Isn't All Bad

It's no secret that many real estate markets around the country are starting to stabilize after the past few years' boom, and Florida is no exception. In fact, Fiserv Lending estimates prices will drop as much 4.2% in Tampa over the next twelve months and predicts worse for Miami: a -8.8% price change between now and this time next year. The fact is that we're simply experiencing some stabilization in the housing market. Recently, industry giant Freddie Mac had several upbeat projections to make. First, while the real estate market isn't going to gain as much in value as it has over the past few years, prices are going to go up--averaging 2.5% in '07 and then picking up to 3.2% for next year. Freddie also predicts home sales to rise and new homes to start picking up in demand.

Refinance When Rates Are Low

Right now interest rates are still very good, so Florida homeowners considering a mortgage refinance might think about taking advantage of the pleasant spring weather to get out and start shopping for the best deal. Rates are hovering right around 6% at the moment but the general consensus is that they're going to go up before they go down. Freddie Mac predicts a rise to 6.4% for 30-year fixed-rate mortgages by this time next year. If you happen to be in one of the markets suffering a drop in home values, such as Tampa or Miami, then these two factors should be all the more compelling.

Source CNNMoney.com: Forecast: 100 Biggest Markets

About the Author
Gabriel Traverso is a freelance writer, professional musician, and an artist. He resides with his family in Reno, NV.