Nationally, Sales and Median Home Prices Drop

Perhaps fears about making Florida mortgage loan payments do still exist? Across the country, others may share similar hesitations about purchasing a house in their state. How else to explain to disappointing number of national home sales in July?

An unexpectedly sharp drop occurred in this area last month, as home sales fell to the lowest level since January 2004 - prices also fell in all regions of the country except for the South, the National Association of Realtors said Wednesday.

Such a combination had led to the following result: with 3.86 million homes current for sale in the U.S., it would take over seven months to be rid of all that inventory. This should be good news for buyers, however, as incentives will continue to be offered to those seeking a Florida home mortgage.

Basis for a weakened market

The weakness in the market is being driven by higher interest rates, low affordability, and speculators who are dumping investment properties because they couldn’t flip them for a profit.

“I was disappointed, it was a lot lower than I anticipated,” said David Lereah, NAR’s chief economist. “What is clear to me is sellers are more stubborn than I expected them to be. We definitely need a correction in prices in order for buyers to come back into the market.”

He said he expects home prices to come down 5% nationally, more in some markets, less in others. Meanwhile, a few cities in the Florida housing market and California, where home prices soared to nose-bleed heights, could have “hard landings,” he said.

More about home prices

The median single-family home price in the country in July was $231,200, up 1.5% from July last year, but the median condo price fell for the second month in a row and is now $225,600, down 1%.

What is most worrying, however, is how the real estate markets are suffering in Michigan, Ohio, Indiana, Massachusetts, and some parts of Pennsylvania and New York. Job losses in those area are driving home sales down and foreclosures up.

“That’s a whole different situation for real estate, that’s a contraction,” Lereah said. “That worries me more than anything else. It highlights the need for the (Federal Reserve) to stay the course and not raise rates. The economy is a little softer than everybody thought.”

It appears as though the Fed does now understand this. Don’t worry about Florida mortgage rates rising too steeply in the future and feel more confident that you can, indeed, fit a Florida home loan into your budget.