Definite shifts have been happening in the national real estate market. With the Fed raising the mortgage interest rate by nearly unprecedented percentage points in the past month, it was expected that changes would begin to happen. Nationally, mortgage applications dropped by 12% in just one week, from the first to second week in May. When compared to the same week one year prior, mortgage applications have gone down by 15% - and they are expected to continue to fall in response to the average interest rate hovering near 6% for most of the country.
According to national real estate platform Realtor.com, news on the inventory front is positive for those looking to buy a home. The sharp lack of inventory has been one major issue facing homebuyers in recent months, and has greatly contributed to the quickly rising prices seen across the county. A report conducted by the online real estate company concluded that inventory for April 2022 shrank - yes, it is still down - by the smallest percentage since December of 2019. Across the county, inventory in April dropped by 12.2%. So, while it is still decreasing, it seems to be tightening up - a welcome sign for buyers. If this continues, and experts do anticipate that it will, there is potential to see year to year growth in inventory numbers by the end of the year. This will go a long way toward stabilizing the market - something buyers have been yearning for.
Interestingly, the type of homes entering the inventory pool in April could also highlight a new trend in the real estate market. New inventory numbers were driven by mid-size homes, which saw the largest increases. This could signal a growing avenue for first-time homebuyers to be able to enter the market - a group that has seriously struggled of late. It will also provide more access to buyers who are looking to move on from a starter home. All of this is good news for average Americans looking to buy a home!
Here in South Florida, another trend was seen in April. The average days on market for a property in the South Florida metro (Miami/Fort Lauderdale/Palm Beach area) had the steepest decline of any area in the country when looking at the year-over-year numbers. In South Florida, days on market dropped from 72 days to just 43. This is significant because it shows the strength of the market and the demand that is still thriving. This could be a result of a number of elements, including the demand, but also the rising interest rate could have buyers scrambling to purchase even faster before they can go up any more. Homes for sale in the Florida Keys are seeing similar numbers, with many properties moving within a few days of being listed. As the reality of the increased interest rates settles it, the market should continue to react both here in the Florida Keys, and elsewhere across the nation.