- April 25, 2024
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Florida’s housing market may be showing some beginning signs of cooling in April: Mortgage interest rates and median home prices continued to rise amid a still-constrained supply of for-sale home, resulting in fewer closed sales compared to a year ago, according to Florida Realtors’ latest housing data.
“Rising interest rates and high inflation are impacting all of us, and those factors are definitely affecting Florida’s housing market,” said 2022 Florida Realtors President Christina Pappas, vice president of the Keyes Family of Companies in Miami. “However, our lack of a state income tax, our beautiful beaches and waterways, and warm sunny weather continues to attract new residents, investors and second-home buyers to Florida, especially in the work-from-anywhere world today. In April, the median time to contract for single-family existing was eight days compared to 11 days during the same month a year ago. And the median time to contract for existing condo-townhouse units was 10 days compared to 24 in April 2021."
Last month, closed sales of single-family homes statewide totaled 28,171, down 15.3% year-over-year, while existing condo-townhouse sales totaled 13,711, down 20.9% from April 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Florida Realtors Chief Economist Dr. Brad O’Connor pointed to the rapid rise in mortgage interest rates this year, particularly in March and April, as a major factor slowing home sales last month, along with still-rising home prices and restricted supply.
“Remember, 2021 was characterized by near-record low mortgage rates that allowed for a huge surge in homebuying demand,” he said. “So it’s simply unreasonable for us to expect that the market will perform just as well this year, now that we are in a higher interest rate environment. Closed sales are performing at about the level they were leading up into the pandemic, despite higher mortgage rates, low supply and much, much higher sale prices.”
The statewide median sales price for single-family existing homes in April was $410,000, up 21.8% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $310,000, up 24% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
O’Connor added, “Again we need to remind ourselves that many home sales that closed in April actually had their prices determined when they went under contract a month or two earlier, just as rates were really starting to take off.
“In the longer run, price growth should start to moderate in response to these higher rates, so this is an important statistic to keep your eye on over the next few months as an increasing share of sellers will inevitably have to start adjusting their expectations to a degree.”
On the supply side of the market, inventory (active listings) remained tightly constrained in April 2022: Single-family existing homes were at very limited 1.1-months’ supply while condo-townhouse inventory was at a 1.3-months’ supply.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.98% in April, significantly higher than the 3.06% averaged during the same month a year earlier.
