12/15/2023
The average mortgage rate is 7.03%, down from 7.29%, as of Thursday, December 7. Although demand and purchase applications increased initially when rates dropped, improvement diminished in the last week. Rates will most likely have to drop to reignite demand.
Despite high mortgage rates, home prices have not crashed. This year the national housing market saw 38% of listings reflect a price cut, compared to 42% of listings in 2022 and 27% of listings in 2021. Last week, from Friday, December 1 to Friday, December 8, inventory fell from 555,717 to 546,424. Compared to 2022, inventory fell from 550,302 to 536,409. Although we have higher rates and prices today, we are not seeing as intense dips. With high prices, home equity is increasing for homeowners.
CoreLogic analysis shows U.S. homeowners with mortgages have seen their equity increase by $1.1 trillion since the third quarter of 2022, a 6.8% gain year-over-year. Dr. Salma Hepp, Chief Economist for CoreLogic stated, “With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up”.
The Tampa Bay housing market remains competitive. As real estate slows down, luxury housing has gained popularity; according to a report by Redfin, luxury home sales jumped 36% in Tampa, the largest in the nation. Meanwhile, single-family home sales in the Tampa metro area only increased 8.3% from this time last year. Redfin Tampa Sales Manager Eric Auciello states, “It’s an opportune time to be a cash buyer, and there are a lot of cash buyers in Florida. We’re still seeing many affluent house hunters moving in from the Northeast and West Coast…Tampa has a ton of new construction, a lot of which are high-end condos”. Read more about Tampa’s luxury boom here.
Florida continues to grow and attract new residents from other states in the U.S. A new state report found Florida with 22.6 million residents - a 1.61% increase compared to last year. This growth is projected to slow over the next several years as groups moving to Florida get older, according to Florida REALTORS®. “Our estimates suggest that over the next five years, our population will grow by almost 300,000 new residents per year, over 800 per day. That is like adding a city slightly smaller than Orlando, but larger than St. Petersburg every year,” Senate president Kathleen Passidomo states.
