Higher mortgage rates and home prices are taking their toll on potential homebuyers and slowing the recent rapid rate of median home price increases, according to a new report released by ATTOM Data Solutions, a real estate data firm – and the U.S. median home price rose 4.8 percent in the third quarter, the slowest rate of annual appreciation since the second quarter of 2016.
However, not all Florida cities are seeing a slowdown in rising home prices yet. In seven Sunshine State cities, price increases are continuing unabated, at least for now.
In 11 other Florida metro areas, however, prices continue to move higher but at a progressively slower pace.
All Florida cities have seen notable price gains since the recession-era real estate crisis, and, according to ATTOM, four Florida cities have now surpassed their pre-recession highs. They include: Pensacola-Ferry Pass-Brent, Jacksonville, Lakeland-Winter Haven and Tampa-St. Petersburg-Clearwater.
“The continued slowdown in the rate of home price appreciation nationwide and in many local markets is a rational response to worsening home affordability – which has deteriorated at an accelerated pace this year due to rising mortgage rates,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “Markets not experiencing this price appreciation cool down may have more of an affordability cushion to work with, but some are in danger of overheating if home price gains continue to run hot.”
Rates of home appreciation slowed in half (74 of 150) metro areas that ATTOM tracks, including Los Angeles, Chicago, Dallas-Fort Worth, Houston and Miami – which all posted single-digit percentage gains in median home prices compared to a year ago.
“I think the key factor underpinning the decelerating price appreciation is the impact of rising rates on the monthly payment,” says Tendayi Kapfidze, chief economist at mortgage marketplace LendingTree. “Absent financing structures that allow a borrower to increase leverage while mitigating an increase in the monthly debt service, buying power is decreasing across the board. This especially affects the marginal buyer who doesn’t have a lot of wiggle room.”
Counter to the national trend, home price appreciation is still accelerating in 76 of the 150 metro areas that ATTOM tracked. For example, the following markets all posted double-digit percentage gains in median home prices compared to a year ago: San Jose, Calif.; Boise, Idaho; Las Vegas; Grand Rapids, Mich.; Lakeland, Fla.; Colorado Springs, Colo.; Dayton, Ohio; San Francisco; and Atlanta.
Metros where price gains aren’t slowing – and current prices vs. pre-recession highs
Pensacola-Ferry Pass-Brent, up 16.1% from pre-recession peak
Lakeland-Winter Haven, up 1.7% from pre-recession peak
Tallahassee, down 0.6% from pre-recession peak
Gainesville, down 0.6% from pre-recession peak
Punta Gorda, down 3.7% from pre-recession peak
Panama City, down 4.3% from pre-recession peak
Crestview-Fort Walton Beach-Destin, down 10.6% from pre-recession peak
Metros with decelerating price gains – and current prices vs. pre-recession highs
Jacksonville, up 6.3% from pre-recession peak
Tampa-St. Petersburg-Clearwater, up 0.3% from pre-recession peak
Deltona-Daytona Beach-Ormond beach, down 2.5% from pre-recession peak
Orlando-Kissimmee-Sanford, down 5.0% from pre-recession peak
Palm Bay-Melbourne-Titusville, down 6.6% from pre-recession peak
Northport-Sarasota-Bradenton, down 6.5% from pre-recession peak
Naples-Immokalee-Marco Island, down 8.2% from pre-recession peak
Port St. Lucie, down 8.4% from pre-recession peak
Miami-Fort Lauderdale-West Palm Beach, down 8.6% from pre-recession peak
Ocala, down 11.4% from pre-recession peak
Cape Coral-Fort Myers, down 15.7% from pre-recession peak
Source: “U.S. Median Home Price Increases 4.8 Percent in Q3 2018, Slowest Rate of Annual Appreciation Since Q2 2016,” ATTOM Data Solutions (Oct. 23, 2018)