PALM BEACH COUNTY, Fla. — The Federal Reserve’s recent interest rate hike has caused some major turmoil in the housing market.
Economists say the move was meant to curb inflation but makes it harder for potential homebuyers to land a home.
Genide Nazaire has been looking for a home for the past two years.
“It was really hard,” said Nazareth. “We pre-qualified for a set amount that was completely different from what the market was offering.”
The latest figures show mortgage rates have reached a 20-year high, forcing Mr. Nazaire to maintain the status quo.
“We just renewed a lease that we hadn’t planned for two years ago,” Nazareth said. “Everything is too expensive. I mean, a house that was originally $250-300,000 in 2018/2017 is now $5-600,000 for him.”
According to Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage was 6.92%. This is his highest average rate since April 2002 and more than double his rate a year ago.
Realtor Michael Brooks said, “We need to lower prices a little bit, or have more people with money from other states, investors, etc., buy out all the real estate.”
Brooks said he’s still very busy due to his overall interest in the market, but high interest rates are tough on people struggling to afford a home.
“In the Florida market, real estate prices are up 30% year-over-year, basically shutting everyone out of the market,” Brooks said.
Habitat for Humanity of Humanity of Palm Beach County works to bring homes for families in the area.
“For low-income people, that’s impossible,” said Peter Gates, CEO of Habitat for Humanity in Palm Beach County. “Without nonprofits like ours, they wouldn’t have had a chance.”
Habitat held its annual “Over the Edge” fundraising event on Saturday. Dozens donated for the opportunity to take down the West Palm Beach skyscrapers.
“It’s about doing the impossible,” Gates said. “We are sending the message that we are doing something very difficult but very necessary in Palm Beach County to build and repair homes for low-income people.”
The reality is that as long as inflation is still a problem, homebuyers like Nazareth will be waiting for an opportunity.
“I see no light at the end of this tunnel,” said Nazareth. “We may get kicked out of Palm Beach. We may need to consider moving elsewhere.”