Jul 13, 2023 - Real Estate

"Golden handcuffs" lock up Florida's housing supply

Illustration of a handcuff on a keychain in a lock

Illustration: Sarah Grillo/Axios

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.

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.

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