Skyrocketing home prices over the past few years has certainly not deterred home buyers. However, rapidly rising mortgage interest rates are certainly resulting in a change of plans for many of these would be home buyers. Unfortunately, out of control inflation reaching a 40-year high has forced the Federal Reserve to take aggressive measures. In fact, just this week the Federal Reserve raised the benchmark interest rate by 75 basis points this week to a 1.5% to 1.75% range. To put this into perspective, this increase marks the biggest hike since 1994. So just how big of an impact is this making in the housing market? We discuss below.
Sliced in half
According a recent survey of approximately 900 real estate agents, it is estimated that approximately 50% of home buyers are putting their plans to purchase a home on hold. Most of these would be home buyers are instead opting to wait 6 to 12 months before reassessing whether or not to enter the home buying market. To add to this sentiment, the Mortgage Bankers Association recently reported that the Market Composite Index hit a 22-low. With mortgage rates rising from 3% at the beginning of this year to the current 6% level, this has essentially priced out 18 million households.
Although many believe that we are already in a recession in this country, the Federal Reserve is tasked with the difficult task of controlling out-of-control inflation with aggressive measures while not sinking the economy deeper into recession. One thing that is for certain in the current housing market is that the party has likely been over for home sellers for several months now. In fact, we have already been seeing price reductions on homes listed for sale for several months now. Of course, price reductions for homes were almost unheard of over the past several years. Now more than ever, it is crucial to have a local & knowledgeable real estate professional to guide you through selling or buying in this evolving market. Do you have questions about the South Florida real estate market? Contact Natasha today at Live South Florida Realty, Inc.!
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our trusted “Florida Home Search” app is available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!