High earners priced out of South Florida housing market
MIAMI - Skyrocketing housing prices are touching just about all of us in one way or another.
Now even higher earners are giving the housing market here a second look and deciding to rent instead.
While prices appear to have peaked last summer, they still ended 2022 higher than they were at the end of 2021. And the median U.S. home price has increased 42% since 2019.
Some of those who can afford homes, who make over six figures, still aren't purchasing because of the steep prices and they don't think it's worth the investment because of a series of interest rate increases by the Federal Reserve last year that pushed mortgage rates to their highest level in two decades.
The average long-term rate on a 30-year mortgage reached a two-decade high of 7.08% in the fall. Rates eased in December and January, but have been climbing since early February. The average rate hit 6.73% last week, the highest level since early November. A year ago, it averaged 3.85%.
That rate translates into a roughly 49% increase in the monthly payment on a median-priced U.S. home than a year ago, said George Ratiu, senior economist at Realtor.com.
Because more potential buyers are not taking the plunge, the rental community has become much more expensive and competitive.
We're seeing the cost to live in small apartments soaring. A report from Realtor.com shows rent in Miami is up 51.8%
The report showed that median rent across the country as a whole rose 7.8%, that's a total of 25% higher than before the pandemic.