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Home / Blog / Housing Market / Florida Housing Market is Booming

Florida Housing Market is Booming

April 7, 2021 By Admin

Housing Market in Florida is BoomingAt the beginning of 2020, home sales declined as the pandemic took hold of the U.S. However, partly powered by historically low interest rates, the market picked up during the summer and hasn’t stopped. Since then, home sales and prices have been rising, leading Realtors to suggest that the Florida housing market is booming.

The growth of the housing market is puzzling to many as most of the economy is still struggling. With unemployment still high and many businesses closed or staying afloat by government subsidies, economists caution that these events may be similar to the 2008 Recession.

Is the Florida Housing Market Heading for a Recession?

In the previous boom, home prices experienced a sudden increase as well. In the lead-up to the 2008 financial crisis, lenders and financial institutions took advantage of relaxed financial regulations that resulted in home loans issued to risky borrowers. These loans often took the form of second or third mortgages and were granted to people who had declared bankruptcy or had questionable credit.

Similarities to The Great Recession

Demand for homes and rising prices are two reasons people compare our current economy to the 2008 Recession. In some parts of the U.S., the growth levels are faster and more extreme than in 2008. For example, Miami and Tampa were among the fastest-growing metro areas last year.

Understanding the reason behind rising home prices is important. The current housing boom is not a result of relaxed financial regulations since it is generated from the attractively low interest rates and increased demand.

What is Fueling the Housing Market?

Relaxed financial regulations fueled the 2007 housing market boom. Since then, tighter credit requirements have considerably changed the housing market.

Currently, rising home prices are driven by organic supply and demand. Within the last few years, millennials aged between 25 and 40 have entered the market in large numbers, increasing demand.

Low home inventory is another factor fueling the housing market. In addition to the low number of homes on the market, new builds struggle to keep pace with demand. Plus, with COVID-19 and the lockdown protocols, low home inventory was heightened due to the lack of construction.

With the shortage of land and the increased price of building materials, it is difficult to predict when the housing market will normalize.

Will the Housing Bubble Burst?

While the current housing boom doesn’t have the characteristics of the 2007 boom, there are some concerns on the horizon.

The economic disruption and job losses due to COVID-19 have so far not affected the housing market significantly. However, reports have confirmed that more than 2 million homeowners nationwide are 90 days or more delinquent on their mortgage.

While a housing market with low inventory could resolve some of the current distressed properties, much will depend on the Homeowners Assistance fund. The fund provides states with funds to support homeowners who are struggling with utility and mortgage payments.

2021 Housing Market

As of now, it looks as though the housing market will continue to trend upwards. With low inventory in Florida, home sales and home prices aren’t likely to slow down. As the economy recovers, government assistance programs should reduce the number of foreclosed homes on the market.

Over the last few years, Florida has been a seller’s market, and despite the economic disruption of 2020, this looks unlikely to change. With demand high, interest rates, and inventory low, the Florida housing market boom is predicted to continue throughout 2021.

Marimark Mortgage

Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.

We specialize in mortgages for first-time homebuyers, conventional home mortgages, refinance loans, reverse mortgages, and FHA, VA, and USDA mortgage options. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.

To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application or contact us.

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Filed Under: Housing Market

Opinions, estimates, forecasts and other views contained in this page do not necessarily represent the views of Marimark Mortgage or its management and should not be construed as an offer to provide financing at the rates or terms mentioned. Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval. Although Marimark Mortgage attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. Information from this page may be used with proper attribution.

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