TAMPA, Fla. (WFLA) — Mortgage rates in the U.S. are higher than they were a year ago, higher in fact than they’ve been since the start of the COVID-19 pandemic, and even further. Rates haven’t been close to 5% for a 30-year fixed-rate mortgage since November 2018.
According to real estate company Zillow, the higher mortgage rates are affecting the way homes are selling. While values are continuing to increase, the month-after-month price ramp up has slowed. Part of it is the mortgage rates going up, but also the lack of available homes to sell or buy.
In the Tampa metro area, only 9,228 homes were available for sale, a 27.3% lower portion than the year previous year, according to Zillow data. While total listings rose 11.6% from February to March nationally, inventory is still more than 50% lower than in 2019 across the country.
“Total listings jumped 11.6% from February, the biggest monthly gain in data through 2018,” Zillow said. “Looking back to the first quarter of 2019 for a pre-COVID seasonal comparison, national inventory this March was 52.2% below its March 2019 level.”
Additionally, Zillow said prospective homebuyers were not yet deterred by higher home prices caused by the housing shortage heating up the market. Coupled with higher mortgage rates, the Zillow home Value Index for March showed prices across the U.S. were up 20.6%.
Annual price growth in Tampa was 33.1%, according to Zillow. While average home prices in the country were about $337,500, in Tampa prices averaged nearly $353,000 instead. Zillow reported the monthly payment on a typical Tampa home was now $1,376, assuming a 30-year mortgage and a 20% down payment.
“That’s 23.1% higher than the start of the year, and 52.3% higher than a year ago,” Zillow said. “Newly pending sales are up 8.3% from February, and DOWN 20.1% from last year.” The rental costs are still higher than the updated mortgage reports, meaning owning a home, if you can purchase one, is still less expensive on a monthly basis than renting.
Home sales are happening faster, too.
“Across the U.S., inventory rose 11.6% in March, and newly pending sales grew by the exact same amount,” Zillow said. “The typical time on market also decreased to nine days, two days faster than in February.”
Issues of affordability aren’t confined to just home purchases and mortgage costs. Zillow’s data showed rents were up 28.1% in March, compared to the year before. The average rent in the Tampa metro was priced at $2,029, according to Zillow. It’s important to note that the price average covers all types of rentals, including houses and multi-bedroom apartments. The average rent in the U.S. was reported as $1,904 according to Zillow. They said it was the first slowdown in annual rent growth reported since February 2021.
The various factors changed in the housing market have caused Zillow to revise its growth forecast for March 2023. Now, the company expects growth to reach a level of 14.9%, compared to previous forecasts of 16.5% in the previous month. The company’s home sale forecast was lowered too, to 6.09 million home sales this year, 0.5% lower than 2021.
According to Zillow, overall inventory was at 754,000 homes available in March. It was the first growth recorded by the company in six months of “straight declines.” Of the 100 largest metro areas in the U.S., two market areas in Florida were in Zillow’s “top three fastest growing” areas. Those markets were Fort Myers and Sarasota. The third was Austin, Texas, ranked second, before Sarasota for growth.
However, Zillow said those predictions are based on a “remarkably competitive housing market” in 2022. With six more expected rate increases coming from the Federal Reserve this year and inflation continuing to increase, economic forecasts are constantly being amended as influential factors change.