Both newcomers and born & bred Floridians with a moderate income have lately been facing numerous challenges when buying a home.
One of the drivers exacerbating the situation was the recent increase of interest rates by the US Federal Reserve System in its efforts to curb inflation.
According to the Mortgage Bankers Associations, the average interest rate under one of the most popular mortgage lending programs in the USA currently exceeds 6%. This has happened for the first time since 2008.
Another factor contributing to Florida’s housing affordability crisis is the influx of real estate investors actively purchasing properties. A study by Redfin showed that in the fourth quarter of 2021, these investors purchased a record-setting share of the US housing stock. 75% of investors made cash transactions to avoid paying the high interest on mortgage loans.
Meanwhile Florida’s residential property market is still experiencing a boom, although some other states have reached a certain slowdown. That is why buyers who have to take a loan to purchase a home are sometimes hard put to find sellers ready for such a risk.
Holly Meyer Lucas, owner of Meyer Lucas Real Estate, believes that local residents looking for a home are suffering from a shortage of supply in the Florida market and inability to compete with cash buyers arriving from the northeast and California.
There is, however, a hope that in the nearest future people who invested in Florida real estate in a hurry will start selling it to find a home to their taste.