High interest rates and home prices present challenges for home buyers
GAINESVILLE, Fla. (WCJB) – Soaring interest rates and home prices are presenting challenges for home buyers in North Central Florida.
As prices are rising, it is difficult for residents to buy homes.
People come from out of state to buy homes with cash, which causes a lot of competition in the market.
When homebuyers pay cash, it also impacts loan officers.
“So we have to compete with cash offers every day, multiple offers on the same property. Sometimes we’ve seen 10, 15 offers at the same time on a property. A lot of them are cash,” said Landmark Mortgage Planners Branch Manager Rob Ziebart.
The alternative avenue buyers use is deferred finance provision.
Ziebart said “that’s where they buy silver to compete with the supply.
Then, right after the close, extract the money with a refinance to bring the money back into their pocket and put it somewhere else where it would grow a lot more. Rather than when it is locked in the house and earns no interest”.
The average home was selling for $370,000 in Gainesville, up 21% from a year ago.
In Ocala, the average house price was 28% higher.
Estate agent Donavon Horne said with such a competitive market, he has a suggestion for new home buyers.
“Buying a home is one of the biggest purchases you will ever make. Whatever market you are in. Personal finance is an important part of it. I always encourage people to really assess where they are. In terms of their personal finances and their plans, then, you know, consider those things,” Horne said.
Experts say the rise in interest rates will push many home buyers out of the market, it will also slow the rise in house prices but intensify demand in the rental market. Just last week, the Federal Reserve raised the interest rate to 0.75%, the biggest hike since 1994.
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