One of the biggest questions in the real estate industry today is whether we’re in or heading towards a housing recession. The topic is thrown around but who and how do we define that? Inman and Matthew Gardner, Windermere Real Estate’s chief economist share what a recession is, and whether the phrase “housing recession” is appropriate when describing today’s market in their latest article.
What we do know is that more and more buyers are backing out as a result of the latest mortgage rate increase that went up from 5.89% to 6.02% in mid-September.
When mortgage rates sit around 5% people are still willing to buy, but when the percentage point moves past 5% to the 5.5-6% bracket, buyers start to back off. The significance of this is that for much of 2021 buyers could get a 30-year mortgage around a 3-4% rate and today rates are closing in on 7% – a dramatic change in affordability in a short amount of time. If rates do climb to 7%, the housing market correction will be deep and ugly, reports HousingWire.
Last month, closed sales of single-family homes in Florida totaled 24,877, down 15.8% year-over-year, while existing condo-townhouse sales totaled 10,000, down 20.3% compared to August 2021, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations.
One contributing factor to these downfalls is that the number of overvalued housing markets in the US quadrupled in 2022 and Tampa is on the list of eight overpriced markets in the US.
As mortgage rates rise and home sales decline, here’s a look at GOBankingRates 2023 housing market predictions and why spring and summer of 2023 may be a good time to buy.
In other news, Hurricane Ian left tremendous damage to SWFL this past week. Due to the devastation, Florida Realtors Disaster Relief Fund has been activated and is accepting applications for assistance. Here are the links to the applications for assistance, individual application, and brokerage application. Here is the online form to donate to the Disaster Relief Fund.
Other Hurricane Resources:
Making a Property Insurance Claim | File a Flood Claim | How Homeowners Can Get Mortgage Help | How to Apply for FEMA