According to the National Association of Realtors home-affordability index, it’s harder to afford to buy a home now that it’s been in over three decades. That means homes are harder to buy now than they were in 2008 during the great recession. This is because there’s a larger gap between how much buyers can qualify to borrow and what homes are priced at.
What’s even more troubling, is index calculation was based on June 2022 numbers, before the FED raised the the interest rates another .75% in July which will likely make matters worse. The Fed is expected to raise rates again in September which will likely make affordability even worst because with each increase in rates, the amount of money home buyers can borrow goes down.
The big question that no one seems to be asking, is since homes are harder to afford now than they were in 2008 when the Florida housing market crashed, can we expect to see a similar situation happen again? Will Florida home prices drop 40-60% again? If so, when might that happen?
From the Wall Street Journal…
Are home prices dropping in Florida as much as in California at the present time. We are from Miami and the first time that left was in 1964 to California and returned in 1981. The second time we left in 2004 to Virginia after retirement to be closer to our son and we are now planning to return to Florida this year to be closer to our family. We have always owned our homes and we are planning to purchase a property this time again but not at the current prices. What do you recommend please. Thank you
Miami seems to be one of the only places in FL that is still seeing price appreciation and and not a big increase in DOM. Ron, why do you think this is and do you believe it is still going to drop a great deal by 2024? I rent right now and the rental prices are absolutely ridiculous! I am paying more to rent my house than my sister pays on her mortgage on Long Island. 5000 and they just raised the rent to 5200. It is killing us. And the house is not even very nice. It is owned by a corporation. I would love to leave Miami. It is an awful city and makes me feel like a foreigner in my own country.. But, jobs have us stuck here right now. I question my decision to wait to buy a house every day.