Monday, June 27, 2022

High interest rate and home prices presenting challenges for home buyers

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GAINESVILLE, Fla. (WCJB) – The spike in the interest rate and home prices are presenting challenges for home Buyers in North Central Florida.

Since prices are up, it’s difficult for residents to purchase homes.

People are coming from out of state to buy homes with cash, that’s causing a lot of competition in the market.

When home buyers pay in cash it also impacts loan officers.

“So, we have to compete with cash offers every day, multiple offers on the same property. Sometimes we’ve seen 10, 15, offers at the same time on one property. A lot of those are cash,” said Landmark Mortgage Planners Branch Manager Rob Ziebart.

Alternative avenue buyers are using is the delayed financing provision.

Ziebart said “that is where they buy cash to compete with the offer.

Then right after closing, extract the money back out with a refinance to bring the money back into their pocket and put it elsewhere where it would grow a lot more. Rather than when it’s locked up in the home and, and not earning any interest”.

The average home sold for $370,000 in Gainesville, that’s 21- percent higher than a year ago.

In Ocala, the average home price was 28 percent higher.

Realtor Donavon Horne said with such a competitive market, he has one suggestion for new home buyers.

“Buying a home is one of the biggest purchases that you’re ever going to make. Regardless of what market you are in. Personal finance is a huge part of that. I always encourage people to really evaluate where they are. As far as their personal finance and what their plans are, and then, you know, factor these things, “said Horne.

Experts say the increase in interest rates will push many home buyers out of the market, it is going to also slow down home price increases but intensify demand in the rental market. Just last week, the federal reserve increased the interest rate to 0.75%, which is the largest hike since 1994.

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