Plenty of opportunities at play for clients ready to buy now, says LO
High interest rates and borrowing costs are biting the Florida housing market, with purchase activity dipping in May even as prices inched upwards.
The number of homes sold across the state fell by 4.9% last month compared with the same time in 2023, according to Redfin’s latest data, as properties stayed unsold for longer (55 days compared to 42 the previous May) and more listings hit the market.
The number of newly listed homes jumped by 10.9% to 48,234 properties, Redfin said, as months of supply also increased – but home values continued to rise, with the median sales price climbing 3.3% year over year to $420,700.
The average rate on a 30-year mortgage across the country continues to hover around the 7% mark, with the Federal Reserve indicating on Wednesday (June 12) that it’s opted to hold its key rate steady yet again.
Still, for buyers determined to make a move in the current Florida market, plenty of opportunities are presenting themselves, according to a loan officer based in the state.
Read more: How to become a mortgage loan officer in Florida
Kris Radermacher (pictured top) of K2K Mortgage told Mortgage Professional America that the onset of rate cuts by the Fed – likely later in the year – would probably see house prices begin to climb even more rapidly than their current pace.
“I definitely think that the smart buyers are understanding that it’s still a great time to buy and there are really amazing deals out there,” she said.
“I think unfortunately, most of the public is going to miss out on the train and then if we do get that rate drop… they’re going to be struggling to still find homes. Although the rates are going to be better, in Florida where I live, the housing prices are going to jump back up.”
Is co-ownership the next big thing in the US mortgage market?
As affordability climbs further out of reach for many homebuyers, co-ownership – purchasing a home with a friend or other family member – has been a particularly noteworthy trend in the US housing market.
A recent JW Surety Bonds survey said 15% of respondents had taken steps to buy a home with someone other than a romantic partner – and Pacaso also noted a significant jump in the number of Americans teaming up with another person to purchase a property.
It’s a trend that could also be set to gather pace in Florida, according to Radermacher, as home prices continue to rise.
Mortgage applications for home purchases in the US rose for the first time in five weeks as mortgage rates eased closer to 7%, according to Mortgage Bankers Association’s index of mortgage applications.https://t.co/9olF6tApZ3
— Mortgage Professional America Magazine (@MPAMagazineUS) June 12, 2024
“I think the new idea of affordability is different,” she said. “I think some of us used to laugh when Golden Girls came out. It was four elderly women who were friends, and you kind of laugh because you’re like, ‘Why would four people live together that were semi-strangers becoming friends?’ I think that could weirdly be the new norm.”
On that note, to younger clients, Radermacher’s advice often centers around the idea of co-ownership: “If you’re that close and you’re going to be in the area, collab together and buy a house,” she said. “You’ll get way more bang for your buck. And I think that’s going to be what we’ll start seeing a lot more of.”
Value of loan officers’ advice grows as affordability challenges mount
For Florida’s mortgage broker and loan officer community, recent times have seen similar trends to elsewhere in the country – namely, a cooler market and a constant need to innovate to keep bringing in business.
Even where buyers are facing affordability hurdles or being priced out of the market today, Radermarcher said it’s incumbent on mortgage professionals to stay in touch with those clients and provide counsel on how to advance on the path towards ultimate homeownership.
“I think it’s just about educating, truly explaining to people, and helping them focus on how to make that plan if it’s not today,” she said. “We panic because we’re not making the same money. I think a lot of LOs are dropping that opportunity to show people how they can get there and staying in touch with them to keep them motivated to stay on the path.”
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