Headwinds in Central Florida: Interest Rates & Home Sales
The Orlando Regional REALTOR® Association (ORRA) has recently unveiled statistics that spotlight some challenging aspects of the Orlando housing market.
Interest Rates on the Rise: The recorded interest rate for July stood at 6.8%, a minor increase from June’s 6.7%. Strikingly, this is the second-highest rate Central Florida has witnessed in two decades. Rewinding to October 2022, interest rates reached a 20-year high at 7.0%.
Realtors Voice Concern: ORRA’s latest survey results have brought to light pressing concerns for the Orlando real estate community. As per the survey, 43% of realtors pointed to escalating interest rates as the foremost challenge confronting buyers. Such rates are persuading potential buyers to either delay their purchasing decisions or opt for homes at lower price points.
A Dip in Sales: July witnessed a downturn in home sales by 8.7% from the previous month, with 2,852 homes sold, in contrast to 3,124 homes in June. In a year-over-year comparison, sales in July 2023 were down by 13.8% from July 2022, which recorded 3,309 sales.
Inventory Dynamics: July’s housing inventory was clocked at 5,720, marking a 5.0% growth from June’s 5,450. ORRA’s survey highlighted low inventory as the second predominant challenge for buyers.
A Shift in Home Prices: The median home price for July was pegged at $380,000, down from June’s $385,000. This marks the first instance this year where the median home price has declined. For some perspective, July 2022 saw a nearly identical median home price of $380,900.
Fresh Listings & DOM: New listings experienced a fall of 7.8% from June to July. Homes in July lingered on the market for an average of 39 days, down from 41 days in June but substantially higher than July 2022’s average of 21 days. A shift is evident. Last year, 63% of Orlando realtors reported homes selling in 10 days or less. This year, that statistic dropped to 34%.
Lisa Hill, ORRA President, remarked, “As we near summer’s end with interest rates nearing a 20-year peak, it’s evident that both buyers and sellers are feeling the pinch. Many homeowners are opting to retain their current homes, captivated by low mortgage rates, potentially as low as 3%. Meanwhile, a growing number of buyers are holding back, optimistic about a potential drop in rates.”
Market Snapshot:
- Interest Rates: Increased by 27.7% year-over-year, from 5.4% in July 2022 to 6.8% in July 2023.
- Pending Sales: Saw a decline from 3,964 in June to 3,808 in July.
- Distressed Homes: Constituted 0.9% of all July home sales, reflecting a 10.7% dip from June.
Inventory Insights:
- Rising Inventory: A 5.0% increase from June’s 5,450 to July’s 5,720.
- Supply Trends: The supply in July grew to 2.01 months, marking a 15.0% rise from 1.74 months in June. Notably, a balanced market ideally has a six-month supply.
- New Listings: A downturn of 7.8% from 3,703 in June to 3,413 in July.
Against the backdrop of these dynamics, stakeholders in the Orlando housing market would be well-advised to stay informed and adapt to the evolving landscape. To view this market info in depth, click this link: Market Statistics.
