Last week’s column was a bit of a downer. I’m not saying it wasn’t true, only that real estate sales need a sunnier pathway in order to encourage motion, so let’s see if we can let the sun shine in.
First of all, the fact that homeowners are sitting on more home equity than at any other time in history is not necessarily a bad thing. Not everyone wants to move and many Americans are just as happy to live in their current home atop a mound of equity with a low mortgage rate and wait to retire. Not exactly torture.
Second, the ultra-low interest rates we experienced five years ago gave many homeowners the opportunity of owning a home for the first time. This action could easily come back years from now as the one single thing that turned the United States housing market around.
Finally, between the years 2003 and 2008, mortgage interest rates floated between 6.5% and 5.87%, getting close to where we are now. And guess what? People bought houses every day.
After the third time this year the feds lowered interest rates, the market is finally starting to respond. As of early December, the average 30-year fixed-rate mortgage rate was hovering at about 6.2%. On December 24th, Freddie Mac gave everyone a Christmas gift, lowering the fixed rate to an average of 6.18%.
There are, however, buyers out there who think they’re entitled to a 3% rate and will refuse to buy unless they get it. I would direct these buyers to Freddie Mac’s mortgage rate history and they’ll see rates as high as 16%, and we didn’t lose the real estate structure of the country.
The housing market has been stuck in low gear for some time now, however, home sales rose in November nationally for the third straight month. These three consecutive months of rising sales is the longest streak since December 2024. In addition, mortgage rates have been falling in recent months, boosting home buying activity. Buyers are taking advantage of the slight improvement in affordability and more would likely jump into the market if mortgage rates fall further.
Florida recorded 17,674 closed sales of existing single-family homes in November, up 3.4% over last year. Condo sales were also up 1.6% in the state, totaling 6,099 sales. Although it’s difficult to transfer the end of year trends into the next year’s spring buying season, the economists are not seeing anything in these sales numbers that give us a reason to be pessimistic as the year turns over.
There’s a lot of demand in Florida waiting to be unlocked as affordability improves – and improvements we do see, if at a snail’s pace. Florida remains a very attractive destination for out-of-staters and the only impediment in the last couple of years has been affordability. All of this offers some hope that the housing market nationally may finally show signs of life in 2026; and I predict Florida will be leading the way.
If you’re a homeowner who is clinging to your 3% mortgage and come hell or high water you won’t give it up, you need a reality check: those rates aren’t coming back. Don’t sacrifice your family’s happiness and security because you’re frozen in place.
I thought I would end my first column of the new year on the light side. My friend who lives in New York City shared with me something she saw in the window of a liquor store while she was out for her afternoon stroll: “We don’t have flu shots, but we do have wine shots.” So, there it is, it doesn’t get any better than that … Happy New Year.
