Orlando Local News

Central Florida homebuyers impacted by increased lending rates

todaySeptember 23, 2022

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ORANGE COUNTY, Fla. — The Federal Reserve’s latest rate increase is having a direct impact for local homebuyers.

The Fed raised rates by three quarters of a percent late Wednesday. That means for someone looking to buy a home, the average loan rate is about 7%.


What You Need To Know

  • The Federal Reserve raised rates by three quarters of a percent

  • The average loan rate for a potential home buyer is about 7% for a 30 year mortgage

  • Loan originators don’t see rates to hit 5% again until mid to end of 2023

With the rates where they are currently at, for every $10,000 someone borrows in the loan, it is roughly $60 a month on a fixed mortgage. That means less spending power in an already bare market.

The challenge of buying a home for Angela Manuel has been going on for well over a year.

“I’m looking for a single-family home, somewhere in a nice neighborhood,” Angela Manuel said while browsing homes on realtor.com. “I want to have a yard, so my grandkids can come over and play.”

The current renter has taken a hit financially. Rent for her apartment has gone up $400 a month in Orange County. What she was looking for in her price range for a new home, is now costing $30,000 – $50,000 more.

“Kind of moving outside of the range of where I wanted to be,” Manuel says. “So I am forced to look outside of where I wanted to live.”

With the added cost of a potential mortgage with rates hovering around 7%, Manuel and her realtor are now being forced to widen their search.

“The rates are still increasing, so the buying power has diminished for the buyer,” Jim Fouquet of Abraham Legacy Realty said. “So, whether or not the market is changing, they still may not be able to afford the house available, so we are having to go farther out.”

Manuel who currently lives in Orange County, may be moving to Lake or Polk County where prices are more in her current price range.

Loan originator Scott Fosgate of FBC Mortgage said today’s rates are being directly impacted by ongoing inflation.

“Inflation is the number one killer of bonds,” Fosgate said. “The mortgage rate market follows the bond market. The inflation is what has gotten us here.”

Scott Fosgate, who has been writing loans for over 20 years, said he does not see rates dropping to 5% or below again until the middle of next year, possibly even at the end of 2023.

It’s a double-whammy for Manuel. Rates are up, her rent is up, and it’s now a decision of where and when to set up a home front.

“I gave myself a year to do this, so whatever I am going to do will be within the next year.”

Meaning her current search with Jim continues.

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