Residential property markets that were booming during the coronavirus pandemic and experienced a rapid price growth are the most prone to decline in case of a recession. Statistical data shows that this sector has already slowed down considerably this spring, as the increasing interest rates on mortgage loans forced many potential buyers to back out of home purchase deals.
A weekly review of mortgage rates conducted by Freddie Mac, America’s largest mortgage agency, shows that 30-year mortgages are currently granted at 5.3%.
The Florida real estate market is the most likely to experience a decline, including annual depreciation of its residential properties, if the American economy plunges into a recession. This trend will also affect California, Idaho, and Arizona markets.
Despite these forecasts, large companies and private persons continue investing in Florida real estate. Many concur that even if there is a slump in the local market, it won’t be significant.