CAPE CORAL, Fla. — The housing market in southwest Florida is starting to cool off, depending on how you look at it. This comes as the Fed raised the interest rate again by 3/4 of a percent.
Currently, mortgage rates are sitting close to 6.3-percent. This is the highest level since October 2008, according to the Mortgage Bankers Associations. The number isn't stopping buyers and sellers in some aspects.
Over 30 percent of the market right now is driven by new homes.
"We've gone from 400 homes last year to about 1,400 now," said Adrian Waring, a local realtor. "We're still seeing price reductions. About 13% had a price reduction last week."
He says more houses are sitting on the market for longer than 30 days, and bidding wars aren't as common. We asked FGCU Finance professor Victor Claar if this could be connected back to mortgage rates.
"It’s reduced a little bit of the demand for housing and the housing market because people are now looking at their total monthly mortgage payment," Claar explained.
He expects the Fed to raise the interest rate again, which could trickle back down into mortgage rates. This could drive more people out of the housing market.
"It seems like prices are moderating. It seems like the housing market is a lot less hot," Claar said.
Waring agrees, but he doesn't want to speculate where our market is going from here. He said we'll be able to tell a few months from now as we'll have a better comparison to look at.
"It's hard to tell if we'll see much change at all," he said. "We're probably more of a neutral right now where it's neither a buyer or seller's market."