30-year mortgage rates are near 8% with excellent credit. Interest rates have climbed for the past three months straight. The Fed is considering another interest rate increase for November and December, possibly pushing rates up to 8.5% or even 9%. The reasoning is that higher interest rates will "slow down inflation".
Home sales are at a 13-year low. Factor in the higher cost of insurance and the fact that property taxes are going up to unaffordable levels and the very high cost of labor and materials for home construction... and you have a real estate market that's going to crater.
I personally know several homeowners that had their homes listed for sale, but have removed them from the market in the past 2 months. They will wait and hold on to what they have for now. One real estate agent mentioned to a couple that they should keep their house off the market until at least middle of next year and then decide based on market conditions.
I'm suggesting that the U.S. economy is a three legged stool... and one of those legs is housing and private & commercial real estate. If it fails, the economy goes into a deep recession at best.
Part of FL's problem is the insane insurance rates. We built our house about 20 years ago and the rates have been around 2k per year... this year is was around 6k for the same policy! We upped our deductible to 10k and got our rate down to 3k. I can see how between insurance and the higher interest rates, a normal person trying to buy a house is unobtainable. And around us, a 20 year old double wide trailer on 5 acres is going for 250k and more. That would have been around 100k a few years ago.
On top of all that, because of the ridiculous home prices, the property taxes have gone sky high as well. It is really pricing a lot of normal people out of home ownership.
Most people aren't aware that homeowners' insurance rates went up for people with good and excellent credit to subsidize those with poor credit. Same thing has been done with auto insurance. If you have poor credit, you pay higher interest rates but lower insurance rates.
Comparing Northern Indiana to Central Florida, prices are virtually identical. The only thing I have noticed cost more are CAR INSURANCE and HOME INSURANCE. We have a 2100 square foot home in central FL about 45 minutes to the west of New Smyrna Beach. A lot of people in FL were telling me about how much things have increased especially real estate. In my opinion, home prices are equal to our area in Indiana - so they may be experiencing a change but for me, it's the "new normal."