The 30-year mortgage rate declined sharply to 6.31% in December 2022. After a series of 75 basis point hikes, the Fed reduced its rate hike to a modest 50 basis point increase.
The persistent fall in 30-year mortgage rates is reviving home purchases. According to the Mortgage Bankers Association, adjusted for seasonality mortgage applications jumped 4% in the week ending on December 9.
Mortgage rate reductions imply a more active housing market in 2023. Anticipated a little increase in home sales in 2023 compared to 2022. As the mortgage rates continue to fall to 6% in 2023 with slowing inflation.
Mortgage rate reductions save consumers $150 to almost $200 per month, leading to a lower amount of income required to finance a property. A mortgage is inexpensive if the monthly payment is less than 25% of the household income. In Miami Dade County, the income required for a household to comfortably pay the mortgage drops from $137,000 to around $127,000.
Given the higher labor market circumstances in the Miami metro area, the South Florida house sales market is likely to perform better than the national average. The rate of unemployment in the Fort Lauderdale-Miami-West Palm Beach metro region was 2.3% in October, compared to 3.7% nationally.
Furthermore, South Florida continues to attract residents from high-cost, high-tax economies such as New York and California. According to Florida Highway and Safety Motor Vehicles data published by Florida REALTORS®, one in every three people migrated to Broward County, Palm Beach County, Miami Dade County, and Martin County. All have swapped their out-of-state licenses for a Florida licenses in 2021 and moved from California or New York.