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The low rates in Florida have sparked a lot of activity in the real estate scene in the state. In Southern Florida, experts are encouraged by these rates because they lower the risk of a bubble forming in this popular part of the country. We'll look at what buyers, lenders, and sellers should expect both now and in the future.
More Agreement, Less Fraud
Market analysts have noticed a stronger agreement between homeowner's income and the cost of their mortgage payments. Mortgage payments are, on average, less than a third of the owner's average income in many parts of Southern Florida. Brought on by higher wages plus low mortgage rates, it's a sign of stability that everyone is happy to see.
Sellers can count on strong offers, buyers can count on a strong job economy, and lenders can count on timely payments. It's creating a lot of optimism for Florida, even as the housing prices continue to rise. It also likely has something to do with major areas like Miami reporting less mortgage fraud.
Future Mortgage Rates
While there's no predicting which way the economy will turn, mortgage rates are expected to remain low for 2020 across the country. In an election year, it's not unusual to see the Fed avoid any kind of hike that would distract from the political action in the White House. But even if rates rise, they're likely to remain relatively low when compared to historical fluctuations.
This could be both good and bad news for Southern Florida though. Low rates can encourage people to mobilize to either sell or purchase a home, but persistent rock-bottom rates can encourage people to stay in their current residence. This is because those who have recently refinanced or purchased won't want to move if there are no real financial benefits to a new mortgage.
If you remove the financial factor, you're left with those who will move for other reasons, such as a new job or a growing family. What Southern Florida might see in this case is a stronger rental market. As the available inventory drops, rental prices may rise. But exceptionally low prices seem unlikely as of now, so owners and buyers may just want to keep it in the back of their minds until they hear otherwise.
Mortgage rates have a lot to do with not just the state's economy, but the nation's economy as well. If you're watching the rates closely, it may make sense to jump sometime this year if you're planning on making a move.
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