Want to know what’s going on in the real estate market in Tampa Bay in May 2024? Welcome friends. Today we’re diving into some key trends impacting home buyers and sellers. So let’s get started.
Hi, I am Margaret Jackson, Realtor with the Professional Agent Group at Keller Williams Realty in beautiful Tampa Bay, Florida.
First up, let’s talk about affordability. It’s a major concern right now. Home prices and mortgage rates are high, making it challenging for many to actually afford that dream. Home are less affordable today than at any time since 1990.
Builders: Smaller Homes are on the Way!
Rising prices and mortgage rates are the main culprits, but builders are responding by constructing smaller homes. In fact, more than a third of builders built smaller homes in 2023, and this trend is set to continue. Smaller homes mean some lower costs, and that’s going to help more people enter the housing market. The average square foot of new homes is down about 10% since 2018, and that shift is making home ownership more attainable for many. So builders are also offering incentives and price cuts to attract buyers, and this includes mortgage rate, buy downs, and some other financial incentives. We’re seeing in the market right now.
It’s a good time for us to connect you with some builders and explore some of these opportunities together. There’s limited inventory in many areas and new construction homes are becoming a more viable option for a good number of buyers. So let us know if that’s something you want to explore.
Gen Z and Housing Affordability
Next, let’s talk about Generation Z. Many young people are asking, am I ever going to be able to even afford a home? And the answer is yes, and with what’s going on in the real estate market in Tampa Bay, it is essential to be informed and to be prepared. So Gen Z is starting to enter the housing market and in 2022, about 30% of 25 year-olds already own their home slightly ahead of previous generations at the same age. Now, despite rising costs, there are reasons for optimism for them. So the average monthly mortgage payment has doubled since 2019 from just over a thousand dollars to just over $2000 a month, and that’s a significant increase.
But with proper planning and financial literacy, home ownership’s still within reach for many, many people. And here are some tips for younger home buyers that are wanting to get in the market
- Number one, improve your financial literacy. Start to learn how mortgages work and start exploring some financing options.
- Number two, start saving. Save for that down payment and closing costs.
- Number three, have an open mind. There are opportunities in any market, and if it means putting in some sweat-equity, that might be your door in.
- Number four, do your research. Stay informed about the market and available programs. One valuable resource is down payment resource.com, which lists over 2000 affordable mortgage programs and down payment assistance options. Educate yourself and take advantage of some of these programs.
Mortgage Rates- WHEN will the Interest Rate Drop?
Now let’s discuss mortgage rates. That’s kind of the elephant in the room. Market’s been volatile and those mortgage rates have been fluctuating.
So rates did peak at around 8%, but they have shown signs of relief and experts think that they’ll continue to trend downwards throughout the rest of the year. But the pace is going to be gradual. But key factors that are influencing rates include inflation, the labor market conditions, and geopolitical events as well. And the Federal Reserve’s decision also plays a pretty significant role in that. The Fed has paused rate hikes, and is monitoring those economic indicators pretty closely too. So a rate cut is expected later this year, and that could help bring some mortgage rates down a bit further too.
Inflation Woes Continue to Impact Housing
Inflation does remain though a critical factor, and while it’s come down from its peak, it is still above the federal reserve’s target. Higher inflation, as we know typically does lead to those higher mortgage rates, and the Fed is taking a cautious approach to avoid actually repeating past mistakes of cutting rates too early, which could cause inflation to spike again, and that would get us back to where we started before all of this too.
But Jerome Powell, he’s the chairman of the Federal Reserve, has emphasized the need for more time to see if those consistent trends take shape before making any further rate cuts. But we do still think that rate cuts are on the horizon. It’s essential to be educated as clients about the current market conditions and what to expect.
Be an Informed Buyer
Understanding what’s going on in the real estate market in Tampa Bay, and the why behind some of these trends. This can help alleviate fears and also help you make more informed decisions, which is how we also help people. For example, even a modest drop in rates can bring more buyers and sellers back into the, and in some areas of the country, we’re already hearing of multiple offers on listings. Again, we are here in beautiful Tampa Bay, Florida, and if we can help you in any way, reach out and let us know. Look forward to helping you.
In summary
Now you understand some of what’s going on in the real estate market in Tampa Bay. Affordability is a major concern, with rising home prices and mortgage rates making it challenging for many to afford their dream homes. Builders are responding by constructing smaller homes, making homeownership more attainable. Builders are also offering incentives and price cuts to attract buyers. Generation Z is starting to enter the housing market, and while costs have risen, proper planning and financial literacy can make homeownership achievable. Tips for younger home buyers include improving financial literacy, saving early, keeping an open mind, and doing research. Mortgage rates have been fluctuating, but experts predict a gradual downward trend throughout the year. Factors influencing rates include inflation, labor market conditions, geopolitical events, and the Federal Reserve’s decisions. A rate cut is expected later this year, but the Fed is cautious to avoid repeating past mistakes. Understanding these trends can help alleviate fears and make more informed decisions.
