TAMPA, Florida (WFLA) – Zillow, real estate company, informed US housing affordability hit a 15-year low due to high home prices, higher mortgage rates and rising rents. Based on prices and May data, mortgage rates are on the rise, raising the question of affordability even as inventories start to recover.
“The soaring cost of mortgages, driven by skyrocketing prices and interest rates, has made mortgages less affordable than ever since at least 2007. In response, demand for homes has declined, which has slowed price increases, slowed sales and increased inventory,” Zillow said.
As of Thursday, the interest rate on the 30-year fixed-rate mortgage reached 5.78%. according to Freddie Mac, a federally backed mortgage company. Freddie Mac reported that it was the “biggest weekly gain” since 1987.
Zillow said the higher rate means monthly payments on 30-year mortgages are up 51% year-over-year and 36% since the start of 2022. A “typical” monthly mortgage is reportedly 2127 dollars.
In Tampa, Zillow reported that house prices rose in May. While a “typical US home” is valued at $349,816, according to Zillow, Tampa homes are valued at $375,460. In May 2021, Zillow reported that Tampa homes were selling for $275,152.
House prices rose 36.5% year-on-year, according to Zillow. Home prices rose by 17.6% in May 2020.
Tampa ranked second in price growth for the year, according to the real estate company. “The highest annual growth among the top 50 U.S. metros is in Raleigh (37.3%), Tampa (36.5%) and Orlando (33.4%),” Zillow said. “The slowest annual growth in home values is observed in Washington (10.2%), Baltimore (11.1%) and Pittsburgh (11.8%).”
Zillow said that as home prices soar, the number of listings and awards nationwide has dropped by almost 20% compared to May last year. In Tampa, supply was 1.7% lower than last year, with 11,062 homes on the market, according to Zillow’s inventory data. In May 2021, there were 11,253 of them.
“While the increase in total inventory is reassuring to buyers who have faced fierce competition and bidding wars in previous months, there are still 50% fewer items to choose from than in May 2019, before the pandemic,” Zillow said.
The cost of rent also increased, although it began to decline compared to last year.
The May Housing Market Report says the median rent nationwide is $1,979. However, in Tampa, the rent is $2,089. “Florida continues to lead the list in rent growth, with rents growing the fastest each year in Miami (31%), Tampa (25.2%) and Orlando (23.7%) of all major metropolitan areas.” says Zillow.
Looking to the future, Zillow predicts lower annual house price growth over the next few months. The company expects prices to rise 8.8% over the next year instead of the 10.4% forecast in April. Zillow said this was due to a “market slowdown”.