Many are asking the question are we in a housing bubble or market crashing? There are so many diverse economic answers. As I mentioned in June 2020, in high cost of living areas, many homeowners sold their homes and cashed in big. Unfortunately this left many tenants up in awe due to not having to keep their credit in good standing and saving's in bank accounts.
Many of those homeowners that have sold their homes, a good percentage of them streamed to Florida the Sunshine State to purchase a home. Working from home has been a major and contributing factor attributing to this matter. This eventually led to a housing shortage and builders with new construction homes could not keep up with demand. Even renter's are scrambling and wish they hade better credit and caught of guard as well as buyers. Mortgage monthly payments inflation reached at least 55 percent, as rental rates nearly almost doubled.
Therefore this led to a buying cash buying frenzy and many paid well over asking price. With all this happening many first time buyers lost out on a home of their dreams. Buyers even waived inspection contingencies to make it much easier for sellers to entertain and accept offers. To make it even worse, sixty percent of buyers at that time paid cash.
Prices are expected to rise on an average of nine percent. Interest rates are expected to rise at least five times in 2022, this is to ease inflation overall in our country to include supply and demand. This also will hurt many first time buyers that are borderline with cash and credit scores. It seems to be as long as new buyers continue to flee to Florida and pay over asking price this market will continue to strengthen along with bidding wars. Prices on homes has nearly doubled since the pandemic has started. Home rental's are expected to climb as long as out of State families continue to pile in monthly. Remember every percent the rate goes up, it decreases your purchasing power by 10 percent. Experts continually state this is definitely and continue to be a strong seller's market that may continue through the rest of 2022.
Builders and mortgage companies are now being creative with lending, such as locking in rates for six months and inventory homes locking in with great rates on move in ready homes. Many builders are easing up on highest and best offer on new construction homes. Eventually something will happen to ease the home buying process. Disney Theme Parks remain to bring families to Central Florida as the pandemic loosens in our demographic area. Of course there is much uncertainty in the upcoming nine months as buyers continue to intensify the market along with surges in gasoline prices and political affairs. The goal was to raise interest rates to bring the value of home prices down in due time. However Florida is still going strong. But for how long?