ARE HIGHER INTEREST RATES SLOWING TAMPA HOME SALES?

Here is what Florida Realtor news just reported…

July pending home sales slip a bit

 WASHINGTON – Aug. 28, 2013 – Pending home sales were down in July with higher mortgage interest rates slowing the market, according to the National Association of Realtors® (NAR) monthly Pending Home Sales Index (PHSI).

The PHSI, a forward-looking indicator based on contract signings, declined 1.3 percent to 109.5 in July from 110.9 in June, but it’s 6.7 percent above July 2012 when it was 102.6. Pending sales numbers have risen in year-to-year comparisons for the past 27 months.

I was actually concerned about this several months ago when all the area builders took 3 price increases in a matter of a few months. I had a conversation with a builder rep where I told him I didn’t think the market could sustain what amounts to a 26k price increase. Then interest rates started to rise. Rising prices and interest rates causes several issues for home sales. First is some of the first time home buyers find themselves priced out of the market because there is now very little available in there price range coupled with what they can afford to purchase is now a smaller number because of higher interest rates. The other issue is consumer confidence. People feel uncomfortable with prices and interest rates rising so quickly here in the Tampa market and may sit back from purchasing a home as the last thing people want is a repeat of the past with people upside down a few years from now.

Well, none of us has a crystal ball, but the home sale stats don’t lie and that is to say homes sales dropped in July. As a Realtor, I would still encourage buyers not to be hesitant to purchase a home here in the Tampa area. While on the rise, interest rates are still at an all time low for my life time!

As always, I welcome your comments. If you know of anyone in the Tampa area that is thinking of purchasing a home, please have them contact me, Richard Kemper at 813-777-5332.

Make it a great day!     

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