The metropolitan market housing prices have increased during the third quarter of the year, despite mortgage rates approaching 7% and decreasing sales. Forty-six percent of the 185 tracked metro areas registered double-digit price increases, down from 80% in the second quarter of this year according to the National Association of Realtors.
Starter homes are valued around $338,700. With a 10% down payment loan, the monthly mortgage payment has risen to $1,808, similar to the second quarter of 2022 with mortgage payments being $1,807. This number increased by 49% from one year ago ($1,210).
NAR Chief Economist Lawrence Yun stated, “Much lower buying prices capacity has slowed home price growth, and the trend will continue until mortgage rates stop rising.” He continued, “The median income needed to buy a typical home has risen to $88,300 — that’s almost 40,000 more than it was prior to the start of the pandemic, back in 2019.”
Data shows seven metro areas in Florida are in the top ten largest year-over-year price increase of all recorded gains greater than 18%. These areas include, North Port Sarasota (23.8%); Lakeland-Winter Haven (21.2%); Panama City (20.5%); Daytona Beach-Ormond Beach (19.6%); Port St. Lucie (19.4%); Tampa-St. Petersburg-Clearwater (18.8%); Ocala (18.8%).
One year ago, the average monthly mortgage payment of a typical existing single-family home was $1,226, 50% less than the third quarter of 2022 ($1,840) which is a marginal increase from the second quarter of the year ($1,837), according to the National Association of Realtors.
During this quarter, families spent an average of 25% of their income on mortgage payments, a decrease from the prior quarter of 25.3% but an increase of 17.2% from 2021, as determined by data from the National Association of Realtors.
“A return to a normal spread between the government borrowing rate and the home purchase borrowing rate will bring the 30-year mortgage rates down to 6%,” Yun said. “The usual spread between the 10-year Treasury yield and the 30-year mortgage rate is between 150 to 200 basis points, rather than the current spread of 300 basis points.”