In South Florida, Median Household Incomes Should Rise Steadily in 2007

The area’s high housing costs may not be declining fast enough to make a difference for area home seekers, but recent economic reports have also revealed some good news:

• Experts predict that Florida mortgage rates will remain steady throughout 2007, with some saying they may not even exceed 6.5 percent for a 30-year, fixed-rate mortgage.
• With such a shortage of workers, wages started rising last year, and it looks like the trend will continue.

According to a Moody’s Economy.com forecast for 2007, the median household income is on the upswing throughout the South Florida housing market.

Median earnings are up 2.4 percent in Miami-Dade County, although they are not keeping up with local inflation rates or the cost of Miami real estate.

Just to the north, they are up more than 6 percent in Broward County. Median household income in Florida will rise about 4 percent within the next 12 months.

Throughout the region, home owners continue to cash out on the home equity in their homes, said Economy.com’s Per Gunnar Berglund, who says that he is surprised at the rate of Florida home equity loan withdrawals made on homes that still occured last year, even as the housing market slowed and lenders began tightening financing.

“Clearly, there’s a lag effect between the housing market and the mortgage equity process,” he said.

Berglund believes that home equity withdrawals, which have really boosted disposable income, will finally begin to moderate this year, weighing on consumer spending.