"Golden handcuffs" lock up Florida's housing supply
Roughly 90% of homeowners in Florida with mortgages have a rate below 6%, per Redfin data shared with Axios.
What's happening: Mortgage rates have swung between 6% and 7% in the U.S. over the last 10 months, up from January 2021's historic low of 2.65%.
- That rate jump makes the total cost of buying a home more expensive for buyers that need financing.
Why it matters: Mortgage holders are experiencing the "golden handcuffs" phenomenon: They have a great rate now, but likely can't move without spending a lot more cash, Redfin chief economist Daryl Fairweather tells Axios.
- Since they're staying put and not selling, prospective buyers are left with few homes to choose from.
By the numbers: In Florida, only 10% of homeowners with mortgages had a rate higher than 6% as of late 2022.
- More than 20% of homeowners with mortgages really lucked out and have a rate below 3%.
What's next: New construction, lower mortgage rates and cheaper home insurance would help restore balance to the market.
- But Fairweather predicts that even with the increase of new builds in 2023, it'll take the U.S. a decade to repair its housing shortage.
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