A Quick Market Update

Here’s a look at the impact that inflation has had on our market.

By now, everyone has witnessed the effects of inflation in one way or another. But how has inflation impacted the real estate market? Today I’ll go through the numbers to help buyers and sellers understand what’s going on. At the beginning of the year, if a buyer was purchasing a $500,000 house with 20% down at a 3% interest rate on a 30-year mortgage, the principal and interest payment would be $1,686. Within just 90 days, however, interest rates have gone up by around 2%, meaning that many buyers are now faced with rates around 5%. In that same scenario from before, the increased rate raises the buyer’s monthly payment to $2,147. That’s a $460 increase! Mind you, these numbers don’t include taxes and insurance, which would add a minimum of $300.

"With home prices on the rise, a property’s tax assessed value is sure to increase as well."

For sellers, if you’ve been in your home for a long time and you decide to move, your taxes are going to reset with that new property. With home prices on the rise, a property’s tax assessed value is sure to increase as well. Many homeowners have seen huge numbers coming back on their tax bills, which can be a big adjustment from one year to the next. Remember that if you’re a seller here in Florida, you can take advantage of our tax portability—you can take your portability and homestead exemptions with you to your next property. If you have any questions about how inflation affects the real estate market or you’re interested in buying or selling a home, don’t hesitate to give me a call or send me an email. I’d love to help you.