TAMPA, Fla. — In sticking to its plan to raise interest rates this year, the Federal Reserve this week raised interest rates another .75%, taking its benchmark rate to 2.25-2.5%.
The series of interest rate hikes this year is an effort to slow inflation and the housing market. In Tampa, the effects are already being felt, turning a red hot housing market for sellers into a buyers' market.
What You Need To Know
- Hot Tampa housing market beginning to cool
- The Fed this week raised interest rates another .75%
- Tampa housing prices haven’t dropped much this year, but what has changed is the competition to buy homes
“Because of the interest rate hike, the buyers have lost some of their purchasing power and it has pushed some of the buyers out of the market,” said Robert Tough with EXP Reality in Tampa.
Tough says the days of bidding above asking price just a few months ago are over in Tampa, and that’s giving buyers more wiggle room to negotiate.
Home inventory remains low in Tampa and that’s why housing prices haven’t dropped much this year, but what has changed is the competition to buy homes, with some sales earlier this year $20,000 to $30,000 above asking price.
“The buyers have a more competitive edge over the sellers, so homes are sitting on market a little bit longer, actually will see more active days on market,” said Tough. “And sellers can expect to be on market a little bit longer than the past, the recent past."
Unfortunately, prices in the rental market are expected to continue rising in Tampa.
Tough says people pushed out of buying in the housing market are opting to rent instead, and that is reducing supply even more.
Rental prices could continue rising for months locally.
The Fed meets again in September, when another interest rate increase is expected.