South Florida homeowners are continuing to gain equity in their homes, even as the housing market cools down. A report from ATTOM Data Solutions, a provider of nationwide property data, found that 63% of properties with a mortgage in South Florida were considered “equity rich” in a recent analysis. Of course, roughly 32.5% of homeowners in Florida do not have a mortgage. Nonetheless, home ownership is one of the best ways for Americans to build wealth. In a sense, owning a home is like having a forced savings mechanism that should build as your home appreciates.
Reasons for the equity gains
There are a various reasons why South Florida homeowners are continuing to gain equity. A few of these reasons are:
- Persistently strong buyer demand: Although the rise in interest rates has caused the housing market to slow down across the nation, South Florida continues to see higher demand from people relocating to our area.
- Tight inventory: The inventory of homes for sale over the past several years has been challenging. Needless to say, strong demand + low supply = price appreciation. This price appreciation results in more home equity.
- A thriving economy: Although not mentioned often enough, the South Florida economy has been thriving. Although tourism and hospitality get most of the attention for South Florida’s economy, we have seen various industries relocating to our area in recent years. In particular, we have seen companies in the financial sector relocating to South Florida.
- Low unemployment: As a result of a thriving economy, we are seeing low unemployment numbers in the the South Florida market. This means more South Floridians remain employed and thus are able to pay their mortgages.
In the first quarter of 2023, the median home price in South Florida was $555,000, up from $536,000 in the fourth quarter of 2022. Although buyer demand has softened across the country due to rising interest rates, South Florida continues to see more Americans relocating to paradise. This continual demand combined with the persistently tight inventory of homes for sale has kept home prices strong.
Are you thinking about buying a home in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search app for your smartphone or tablet.