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The US prime rate hit its highest level since April 2022. The fixed rate for 30-year loans hit nearly 7% in mid-October 2022, according to data released by Freddie Mac on Thursday.

The Fed’s decisions to raise interest rates significantly have the main objective of containing inflation in the US economy, which has not yet shown signs of being under control.

The impact can already be felt in the US housing market, which is causing buyers to put off buying. At the selling end, the price reduction movement on the part of the owners begins to take shape. The famous “Bidding War” seems to be coming to an end and the market is finally showing signs of returning to normality, albeit timidly.

But is this a trend? Understand in the next topic.

US interest rates reach highest level in 20 years

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The main reason for the slowdown in the US housing market is high interest rates, which make it more difficult for buyers to pay mortgage installments.

Experts understand that, if interest rates remain high for a long time, then there is a probability that we are at the beginning of a transition from a “seller” market (favorable for sellers) to a “buyer” market (favorable for buyers).

However, there is no consensus that US interest rates will remain high for a long time. The FED (American Central Bank) strategy is to increase interest rates with the main objective of containing the escalation of inflation.

Once inflation is controlled, there is a good chance that the Fed will adopt a downward bias for the US basic interest rate in the next meetings. As a result, the real estate market is stimulated again, with the consequent pressure on prices.

Therefore, this may just be an adjustment period, resulting from a temporary monetary policy. There is no indication that demand for Florida real estate will decrease, nor are there any factors that will accelerate the delivery of new units to the market in the coming years (low inventory). Taking advantage of this moment to “enter the market” can be a great investment strategy, betting on the high expectation of continued future appreciation.

Florida, unlike other American states, was the region that saw the most real estate appreciation in the last year. In a ranking released by the REDFIN portal, 8 of the 10 cities that have appreciated the most in the US, in the last year, are in Florida.

About AMG International Realty

AMG International Realty is a global real estate company, specialized in Florida. If you are interested in finding out more about real estate opportunities in Miami and Orlando, contact me now and chat with me on WhatsApp: +1 305 318 6968 (Heloisa Arazi).

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