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.
Data from the U.S. Department of Commerce indicate a slowdown in home sales. As of October, sales of new homes went down by 1.9 percent to a four-month low. Over the last five years, new home sales had been increasing due to improvements in employment and wages.
A 3 percent reduction in sales in the South coupled with a 13.7 percent decrease in the Midwest contributed to the overall decline in national figures. Sales of residential real estate remained strong, however, in the West with a rise of 8.8 percent. As of September, the nationwide inventory of new homes for sale stood at 246,000. Existing homes experienced a surprising 2 percent surge in sales to a level not seen since February 2007, according to the National Association of Realtors.
Although mixed signals indicate an overall market slow down, interest rates remain relatively low at less than 4 percent for a 30-year, fixed rate mortgage. A person involved in a home sale who has goals about land development could consult an attorney to gain a better perspective on short and long-term liabilities. During the transaction, the attorney could examine easements that might exist, investigate zoning that could affect future building plans and review the terms of the purchase agreement. If necessary, an attorney could assist with negotiations about the contract terms.