The US housing market is entering a precarious phase marked by a substantial decline in median sales and a drastic collapse in investor home purchases, surpassing the pace witnessed during the Global Financial Crisis (GFC). Warning signs are flashing, notably illustrated by desperation among renters in markets like Las Vegas, where concessions reveal a stark decline in demand for apartments at certain price points.
Compounding these challenges, mortgage rates have surged above the 7% threshold this week, casting a shadow over the optimism that prevailed for a Federal Reserve rate cut ahead of the spring buying season. The average rate for a 30-year fixed mortgage, escalating from 6.97% to a peak of 7.13% on February 13, as reported by Mortgage News Daily, has settled at 7.03%. This abrupt increase in mortgage rates is significantly hampering the ability of potential homebuyers to enter the housing market.
Florida’s real estate sector is grappling with falling home prices, primarily driven by a substantial increase in home insurance costs. The insurance crisis has prompted a surge in inventory, as potential buyers, especially those eyeing winter homes, are deterred by soaring premiums. According to the Insurance Information Institute, insurance rates in Florida witnessed a staggering 42% increase last year, pushing the average insurance cost for Floridian homeowners to $6,000—far exceeding the national average of $1,700.
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Just a reminder guys this housing market is totally different and this doesn't look like anything we've ever seen before
Also: pic.twitter.com/AUAFjzLl4i
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) February 19, 2024
Investor home purchases have collapsed at roughly 2x the speed of the GFC pic.twitter.com/t4Ip4s56so
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) February 19, 2024
Tides asset in Las Vegas, Nevada.
These concessions show desperation.
If you see this in a market, it truly just shows demand is not what it once was for apartments at that price point. pic.twitter.com/cR90LKoalb
— Alexander Roth (@RandallHouseRE) February 19, 2024
finance.yahoo.com/news/mortgage-rates-rise-on-higher-inflation-dimmed-rate-cut-hopes-180458797.html
nypost.com/2024/02/15/business/florida-home-prices-fall-over-surging-insurance-costs/
Median age of a homebuyer has risen from:
31 years in 1981 → 49 years in 2024
A telling sign… pic.twitter.com/Kt43ybBikr
— Game of Trades (@GameofTrades_) February 19, 2024