Interest Rate Update

I know that I blog relatively frequently about mortgage rates. I do this because they are so important to my business as a residential realtor. Buyers’ ability to borrow money at a favorable interest rate increases the likelihood that they will purchase a new home. Sellers who then, in turn, sell their homes purchase new homes, and the cycle continues.

Mortgage rates have been favorable for a while now – they even reached historic lows for 30 year fixed mortgages in 2020. While 30 year fixed rates are still low, we are seeing slight increases in those numbers. As of writing this, the average interest payment on a 30 year fixed interest mortgage has gone from under 3% to just slightly over, recently hitting 3.09%. This small variance has had no impact that I have seen on Miami’s incredibly busy real estate market, but once rates increase by a full percentage point buyers actually lose 11% of their purchase power. That would slow the market in that buyers would spend less, sellers, who are now used to a sellers’ market, might not reduce their prices, and houses would sit on the market thereby increasing inventory. This would be a radical shift from where we have been in the 2020-2021 South Florida real estate market! We are certainly not there, but interest rates are something to keep an eye on moving forward. If you are looking to buy or sell, now might just be the best time!