Florida Mortgage Trends

Interest Rates are moving higher, but our bigger program is lack of housing inventory

April 16th, 2022 1:43 PM by Scott Bray

Historically, interest rates are still among the Best even today in the 5% range than they have been many times in my career.  We have high inflation per CNBC financial news (4.13.22) not seen since the 1980s and our interest rates are "only" in the 5% range.  During the 1980s, interest rates were in the teens as I heard in the 12% - 19% range.  I was only in High School during this time but when I opened up a checking account at the bank I remember the bank offering me a standard interest checking account paying 8%.  Wow 8%!!   I feel the current mortgage interest rates are in the range of 4.00% - 5.00% depending on the type of mortgage (conventional, FHA or VA) and your qualifications (credit score and down payment) are still excellent vs other more pressing housing issues.

Our bigger problem is the lack of available homes for sale not only in Florida but around the nation.   For our State of Florida, I have felt for years that there's a migration to Florida.  Not just the people retiring to Florida as long has been a mantra or the goal of people living in colder states but of a true migration.  We have no state income tax and great weather (excluding pesky Hurricane season) but Industry has been coming to Florida expanding our Technology and Space industries locally (Brevard County) for years now. Since Covid 19, a larger growing number of employees who can work from how now choose to work from home in Florida rather than in their current home state.   

In the last two years, we have done loans for people moving from Alaska (6 different families), Oregon, Utah, California, and many of the northernmost states.  I just haven't personally had as many mid-western clients in the previous 27 years as the last few years.  I am wowed by this too but worried as well.

I don't have any solutions for the housing other than to say I do encourage clients to consider new construction.  It seems to be the best bang for the bucks today.  Sales prices could be high for new construction and resale of current homes but at least you get a brand new home.  

I am worried about pricing out the first-time homebuyer and we still get many calls from buyers seeking their first home but it has become increasingly harder for them to find a home that fits their needs.   I have talked to many Realtors and they too feel the pain and anguish of finding lower-priced homes.  

Our mortgage industry is bringing back the "Arm" (adjustable-rate mortgage) loan to help clients consider a lower rate for a shorter fixed-term loan.  The mortgage industry is starting to adjust to the higher interest rates... I just wish builders could build homes faster.  

We're here to help you with competitive rates & low fees for any qualified buyers or refinancing clients.  Please call us if we can be of assistance in Florida at (321) 777-7277.

Posted by Scott Bray on April 16th, 2022 1:43 PM


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