Home News As mortgage rates hit 20 year high, Tampa Bay housing market braces for a cool down

As mortgage rates hit 20 year high, Tampa Bay housing market braces for a cool down

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Over the past two years, a home-buying frenzy sparked by historically low mortgage rates has propelled Tampa Bay from a hidden gem to a real estate hot spot. But now that interest rates have skyrocketed, experts say buyers are finally hitting the brakes.

“Consumer confidence is declining. People are afraid to buy at the top of the market,” said Kristin Smeer, senior vice president of Zonda, a real estate analytics firm.

Average 30-Year Fixed Mortgage Rates Over 7% last weekIt’s the highest in 20 years, according to mortgage buyer Freddie Mac. The Federal Reserve is expected to announce a sixth rate hike this week, which could push mortgage rates higher.

This means that buyers are losing value for money.

Last year, when interest rates hovered around 3.1%, new homeowners in Tampa could expect to pay about $1,100 a month, Smale said. Today, the average mortgage payment is about $2,100.

September data According to Greater Tampa Realtors, deals in Tampa, St. Petersburg and Clearwater fell 36.2% year over year. The number of active listings he increased by 96.9%.

“People are more cautious now,” said Ray Wedge, a finance professor at the University of South Florida’s Muma College of Business. Rather than jumping in headfirst, “if interest rates are likely to fall over time, everyone wants to wait and see what happens.”

Marian Yon Maguire, real estate agent at YES-Homes in St. Petersburg, said first-time homebuyers face the biggest burden. Meanwhile, the luxury market continues to thrive, with wealthy buyers seeking the Tampa Bay area for its warm climate and relatively affordable prices, she said.

YES-Homes’ Rachel Sartain Tenpenny says now might be a good time to find a deal, especially if you can buy it with cash. With less competition, buyers have more room to negotiate.

“List prices are starting to come down, but I haven’t seen housing prices go down,” she said.

For the average buyer looking to move, the best bet is to find a new building, says Wedge.

“Builders want to sell now, so many of them are subsidizing mortgages and lowering prices,” she said.

Smale said sellers will continue to cut prices through the end of the year as interest rates rise. Still, she noted, those hoping Tampa Bay home prices return to pre-pandemic levels shouldn’t hold their breath.

“I’m bullish on Tampa long term,” she said, even though the next six to 12 months could be tough for the local real estate market. “We will continue to grow.”

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