Florida’s Housing Market Seeing Higher Median Prices But Inflation, Interest Rates Impacting Sales

Florida’s housing market reported higher median prices, a rise in new listings of existing single-family homes and continued signs of easing supply constraints in July 2022 compared to a year ago, according to Florida Realtors’ latest housing data. However, inflation and higher mortgage interest rates continue to impact sales.

“The trend of improving for-sale inventory continued in July, which hopefully will also help housing affordability and ease rising prices over time for buyers,” said 2022 Florida Realtors President Christina Pappas, the vice president of the Keyes Family of Companies in Miami. “However, homes are continuing to go under contract quickly: The median time to contract statewide for single-family existing homes in July was 12 days compared to nine days during the same month a year ago. The median time to contract for existing condo-townhouse units was 13 days compared to 15 in July 2021.

“Market conditions can change quickly. A local realtor offers their expertise and guidance to help consumers navigate the homebuying or home selling process,” she added.

Last month, closed sales of single-family homes statewide totaled 23,705, down 22.9 percent year-over-year, while existing condo-townhouse sales totaled 9,341, down 30.7 percent over July 2021, according to data from Florida Realtors Research Department in partnership with local realtor boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

While July’s closed sales were down compared to the same time a year ago, Florida Realtors Chief Economist Dr. Brad O’Connor pointed out, “It’s almost not fair to compare 2022 sales numbers to those from a year ago because 2021 was such a uniquely good year for the housing market, with the 30-year mortgage rate hovering near 3 percent the entire year. But we should also acknowledge that this July, we saw fewer home sales than we did in July of 2019, before the pandemic. This year’s high mortgage rates, combined with a continuation of last year’s rapid rise in home prices have really put the brakes on the number of completed transactions this summer.”

If not for those two factors – higher mortgage rates and rising prices – “buyer demand would be booming in Florida right now,” he added.

“Demographically, Florida is in a great position, with the bulk of the state’s millennials moving into the prime age for first-time home purchases, not to mention the high level of interest in Florida among out-of-state buyers, whether they be investors, retirees or untethered workers.” O’Connor said. “Rents around the state have increased substantially, as well, so it’s not as though renting has become more attractive relative to buying. But we simply can’t ignore the impact that these higher mortgage rates and home prices are having on the market, and we should expect the number of transactions to reflect that as a result over the next several months.”

The statewide median sales price for single-family existing homes in July was $412,303, up 16.1 percent from the previous year. Last month’s statewide median price for condo-townhouse units was $305,000, up 20.6 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

On the supply side of the market, the trend of easing inventory (active listings) continued, rising year-over-year in July. The supply of single-family existing homes increased to a 2.2-months’ supply while existing condo-townhouse properties are at a 2.1-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 5.41 percent in July 2022, significantly higher than the 2.87 percent average during the same month a year earlier.