Market Overview Anne-Marie Mitchell Market Overview Anne-Marie Mitchell

Jacksonville Local Market Report: Q3 2022

KEY TAKEAWAYS FROM Q3 2022:

  • Prices are up from a year ago, but price growth is slowing.

  • Equity gains in the last 3 years have extended the trend of positive price growth after the recession

  • Most buyers in this market have access to government-backed financing

  • Price appreciation and principle payments in the last 3 years have boosted total equity growth since the recession

  • Employment has held up and is on an upward trend

  • Unemployment in Jacksonville is better than the national average and improving

  • Local employment growth is strong compared to other markets

  • Florida's economy is stronger than the nation's, but slowed from last month's 6.69% change

  • The current level of construction is 38.7% above the long-term average

  • Production above trend for an extended period of time could cause prices to moderate as inventory is built up

  • Construction is down from last year, but appears to have bottomed.

  • Monthly mortgage payment to income weak by local standards and could weigh on demand but historically more affordable than most markets

  • The price-to-income ratio is high by historic standards and getting worse but historically affordable compared to most markets.

Mortgage rates continued their upward trek in the third quarter of the year. Due to elevated inflation, the Federal Reserve raised twice its short-term interest rates by 75 basis points each time. While both rising inflation and higher interest rates typically move up mortgage rates, the 30-year fixed mortgage rate surpassed the 6.5 percent threshold moving closer to 7 percent. According to the mortgage finance provider Freddie Mac, the 30-year fixed mortgage rate rose to 5.6 percent in Q3 2022 from 2.9 percent a year earlier. As long as inflation remains elevated, mortgage rates will continue to rise. NAR forecasts the 30-year fixed mortgage rate to average 6.5 percent at the end of the year.

*information from NAR Jacksonville Local Market Report Q3 2022

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Headed Towards a Housing Bubble?

At the beginning of 2022, 45% of home sellers voiced that they strongly believed a housing bubble was imminent. Home sellers and buyers who remember the Great Recession have justifiable concerns. However, this isn’t the housing bubble of years past.

Some facts to calm your nerves:

  • Mortgages aren’t structured like they were in the past. Now lenders are much stricter with who they lend to. They require higher credit scores and requirements.

  • Housing Inventory remains low. Freddie Mac estimates that the nation is 3 million homes short of meeting buyer demand.

  • Buyer demand is still high. People still want to buy homes.

  • Real Estate is a hedge against inflation. A homeowner can lock in their monthly homeowners mortgage payment. This will keep it steady amongst any rate hikes that could happen in the future.

  • This is a market correction, not a crash! A slight decrease in home prices will happen as the market readjusts from record highs.

*info based on NAR official research

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