Fannie Mae (the Federal National Mortgage Association or FNMA) has released its latest forecast for mortgage rates and housing sales, projecting trends through 2026. Let’s break down the key takeaways and explore what they mean for buyers and sellers in today’s market, with a focus on Florida-specific insights.
Mortgage rates are expected to remain elevated, averaging:
6.6% in 2024
6.3% in 2025
These rates are projected to stay above 6% through 2026. While this makes affordability more challenging for buyers, it also reduces competition in the market.
Solutions for Buyers:
Consider financing options like rate buydowns and seller credits for closing costs to ease affordability pressures.
Explore creative ways to structure your mortgage to fit your budget.
In Florida, where median home prices hover around $400,000 (as of 2024), the higher rates could significantly impact monthly payments. However, demand remains strong in coastal and urban markets, particularly in areas like Miami-Dade and Tampa Bay, where inventory is tighter.
The housing market is experiencing some of the lowest transaction levels in decades:
2025 Forecast: Home sales will remain near a 30-year low, with only a modest growth of 4% from 2024 levels.
2026 Recovery: A significant rebound of over 17% is anticipated as affordability improves and pent-up demand drives activity.
Implications for Sellers:
Longer selling times may become the norm in areas with higher inventory.
Homes priced competitively and presented well can still sell quickly despite the slower market.
Florida markets like Orlando and Jacksonville have seen fewer transactions due to rising interest rates, but the state’s population growth—particularly from out-of-state buyers—continues to create demand. This demand is most evident in suburban areas with new construction developments.
Home price growth is expected to remain modest over the next few years:
2024: +5.2%
2025: +3.8%
2026: +3.6%
This steady growth means buyers may not feel rushed to enter the market, and sellers should set realistic price expectations.
In Florida, home price growth is expected to outpace the national average in 2024, particularly in high-demand areas like Naples and Sarasota, where luxury markets are thriving. However, inland areas may see slower growth.
Buyers, particularly in areas with higher inventory, may find opportunities to negotiate better deals. Here’s how to position yourself:
Research Local Markets: Focus on neighborhoods with higher inventory and lower competition.
Make Strategic Offers: In high-inventory areas, consider making offers below the asking price.
Explore Financing Options: FHA, VA loans, or rate buydowns can help secure an affordable monthly payment.
Florida’s real estate market offers a variety of opportunities for buyers. In areas like Fort Myers and Tallahassee, where inventory is relatively high, buyers can negotiate favorable terms. Meanwhile, coastal properties in South Florida may still face bidding wars despite higher rates.
While the market is slower, motivated buyers are still out there. Sellers can maximize their chances of success by:
Pricing Competitively: Attract serious buyers by setting a realistic and appealing price.
Enhancing Presentation: Ensure your home is well-marketed and prepared for showings.
Florida sellers in hot markets like Palm Beach or Miami should focus on luxury amenities and marketing to international buyers, while those in suburban or rural areas should highlight proximity to Florida’s natural attractions and lifestyle benefits.
Be Patient: Take your time to find a good deal, especially in high-inventory markets.
Stay Ready: Be prepared to act quickly if you spot a property that meets your criteria.
Partner with an Expert: Work with an agent who understands the nuances of your local market.
Prepare Your Home: Invest in presentation and staging to make your property stand out.
As the housing market evolves, understanding these trends can help you make informed decisions. Whether you’re buying your first home, upgrading, or selling, staying ahead of the curve is key to success. Visit Ubiquity Real Estate Group to learn how our expert agents can help you navigate this dynamic market.