Marla Martin, Communications Manager, or Jeff Zipper, Vice President of Communications
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Editor’s note: This is the third in a series of five articles focusing on the advantages Florida’s residential real estate market currently offers to buyers.

Why Buy a Florida Home Now?
Low Mortgage Rates Cut Payments, Say Florida Realtors®

ORLANDO, Fla., Jan. 21, 2008 – Edie Grien-Scherer remembers buying a home in 1980 with an 18 percent mortgage loan. “Five years later, I was able to get the rate down to 14 percent,” she said. “By comparison, today’s rates remain at historically low levels.”

Grien-Scherer, a broker-associate at Coldwell Banker’s office in the Fort Lauderdale suburb of Weston, is among the many Florida Realtors® who recognize that low year-end mortgage rates help multiply buyers’ financial power.

With the current rate of about 6.5 percent for a 30-year fixed-rate mortgage, a buyer would pay about $1,900 a month (principal and interest) on a $300,000 loan. If the rate increased to 7.0 percent, that loan payment would go up by $100 a month or $1,200 a year for the life of the mortgage.

“Lower mortgage rates give buyers greater power in the housing market,” said Randy Martin, broker-associate with RE/MAX 200 Realty in Winter Park. “Combine that with lower prices and you have ideal conditions to purchase the home of your dreams.”

Looking ahead, the National Association of Realtors® (NAR) expects 30-year fixed-rate mortgages to rise slowly to the 6.3 percent range by the end of 2008.

For Florida buyers, conditions in the national mortgage market are continuing to improve in other ways as well.  Rates and fees on “jumbo mortgages” for expensive homes have improved since the August 2007 credit crunch, according to Lawrence Yun, NAR’s chief economist.

Another positive factor is the increasing use of FHA and VA mortgages, which are helping a growing flow of first-time buyers finance their purchases.  The FHA market share for home purchases is expected to triple over the next three years, from an estimated 4 percent in 2007 to 12 percent in 2009.

“For buyers who qualify for conventional financing, mortgages are available at favorable rates,” said Yun. “Major FHA reform will also help first-time home buyers enter the market and will provide safer alternatives for many subprime buyers.”

NAR has been urging changes to the FHA program that would allow greater flexibility and increase loan limits. Those reforms could greatly increase the use of the FHA program, said Yun. That would further accelerate use of FHA loans in 2008.

The Florida Association of Realtors (FAR), the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 150,000 members in 67 boards/associations. FAR's Media Center Web site is available at http://media.floridarealtors.org.