As interest rates rise, uncertainty looms over South Florida real estate market buyers, sellers
MIAMI -- As 2023 draws to an end, it is clear that South Florida's real estate market continues to change but what is unclear is what direction it will take as the calendar turns to 2024.
The home inventory is fluctuating as some sellers have dropped their prices even as skyrocketing insurance rates and taxes are leading some would-be buyers to wait.
And then there are the high mortgage rates affecting the South Florida housing market.
Larry Burns has lived in his home in Plantation for 30 years and says he would like to sell and move but not with the current mortgage rates.
"It's about impossible for anybody," he said. "I'm a veteran and even those rates have gone high."
With current mortgage rates at the highest level in decades, some buyers are sitting it out.
"Rates are at nearly 8 percent, the highest in 23 years," said veteran mortgage broker Michelle Smith, adding that there is still high demand for houses.
And bidding wars can still happen, but even with high mortgage rates hesitation can be a loss.
She recommends taking the leap with the hope of refinancing down the road.
"Only if they feel comfortable with the payment (and) If that payment fits their budget and they can afford to do it," she said. "The key is finding everything out up front. Know your numbers; be wise (and) don't have surprises close to closing."
So would she recommend people taking the leap and buying something in the current market?
"Yes but only if they can afford it," she said.
Burns said there's only one way he'll buy now
"If interest rates were lower I would probably do it," he said. "My kids live in Charlotte, North Carolina so I don't want to sell and go up and pay a high interest rate that may not match what I have down here."
Between inflation, the cost of renting or buying and stagnant wages, the gap to home ownership is getting wider.
CBS Miami compiled numbers from the Health Resources and Services Administration to get a clearer picture of what wages are necessary to afford housing in South Florida.
Here's what we found:
Miami-Dade County, 2021
A family of one adult would need to earn $32,982 per year to afford basic needs.
That comes out to about $16 an hour or $2,749 a month.
Of that $2,749 monthly income:
- 45% would go to housing ($1,231)
- 0% to child care ($0)
- 7% to health care ($203) and
- 11% would go to food ($309).
In Miami-Dade County, there are about 235,600 single adults living alone without children (25% of households). The median annual income for one-person households is $27,496 ($2,291/month).
A family of one adult and one school-age child would need to earn $52,955 per year to afford basic needs. That comes out to about $25 an hour or $4,413 a month.
Of that $4,413 monthly income:
- 35% would go to housing ($1,551),
- 9% to child care ($384),
- 16% to health care ($719) and
- 13% would go to food ($556).
In Miami-Dade County, there are about 71,600 single-parent families with one income earner (11% of families). The median annual income for families with one income earner is $43,510, ($3,626).
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A family of one adult and two school-age children would need to earn $60,561 per year to afford basic needs. That comes out to about $29 an hour or $5,047 a month.
Of that $5,047 monthly income:
- 31% would go to housing ($1,551),
- 15% to child care ($769),
- 15% to health care ($760) and
- 16% would go to food ($791).
In Miami-Dade County, there are about 71,600 single-parent families with one income earner (11% of families). The median annual income for families with one income earner is $43,510, ($3,626).
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A family of two adults and two school-age children would need to earn $70,790 per year to afford basic needs. That comes out to about $34 an hour (or $17 with two income earners) for a total of $5,899 a month.
Of that $5,899 monthly income:
- 26% would go to housing ($1,551), 13% to child care ($769),
- 14% to health care ($833) and
- 17% would go to food ($1,031).
In Miami-Dade County, there are about 108,300 two-parent families with two income earners (17% of all families). The median annual income for families with two income earners is $84,656, ($7,055).
