In November 2016, the construction of new homes fell around the country, but the dip was greater than what experts had previously forecast. Observers say that while many factors impacted sales and construction, historical spikes in mortgage rates might have major stopping power that slows real estate market growth in Florida and elsewhere.
Residential property prices have rebounded well since crashing in the wake of the 2008 financial crisis. Furthermore, houses and apartments in Florida have once again become attractive propositions for both American and foreign investors. While values are also soaring in cities like Tampa, Orlando and Jacksonville, Miami is seen by many experts as being the best place in the Sunshine State to buy real estate.
When interest rates are rising and economic indicators are good, investors in Florida and around the country tend to concentrate on equities over other investments like real estate investment trusts. Most experts expect the move away from REITs to pick up even more momentum in the wake of the Federal Reserve's announcement of a quarter point rate hike on Dec. 14, but some analysts say that investors should take a close look at the opportunities in certain areas of the commercial real estate market before pulling their money out.
Florida residents who are considering a home purchase may be wondering what the predictions are for the real estate market in 2017. The difference between the number of homes for sale, increased interest rates and higher prices may affect their plans.
The low-interest rates on home loans in Florida and the rest of the country that have sustained the real estate market have started to edge upward. Lenders expect the Federal Reserve System to set a higher benchmark interest rate. Already 30-year, fixed rate mortgages have experienced an average increase of 37 basis points since the start of 2016. Concerns about inflation, aroused by the election of Donald Trump, could also contribute to a rise in borrowing costs.