Categorized | Finance and Mortgage

Cash Sales Dominate South Florida Housing Market Despite Record Low Rates

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Although mortgage rates have hit record low rates for 30-year and 15-year fixed loans, the majority of South Florida buyers aren’t borrowing the money need to buy homes. Rather than taking out a loan, most are buying with cash.

While one would think that everybody would want to take advantage of the very low rates being offered, the truth is that many people are finding themselves unable to qualify due to the most recent set of lending restrictions. Nearly sixty percent of housing transactions in the region have been paid for in cash. However, those that are buying in cash aren’t the average homebuyers. They are, for the most part, foreign investors that are looking to take advantage of the depressed real estate prices.

The lending restrictions have led to a continued decline in sales, as most people aren’t able to finance the purchase of a new home. Sales of both condos and houses in the region have fallen by double-digit percentages. Many real estate analysts believe that the massive drop off in sales is neither due to a lack of supply nor due to a lack of demand. Instead, they believe that lending restrictions are making it impossible for most families to secure the financing need to buy a home.

Before approving any kind of loan, most banks in South Florida are now requiring full documentation of such items as income and employment. They also are looking for those individuals with excellent credit, a stable job, and more. Even if one meets these criteria, there is no guarantee that the bank will approve them for a mortgage loan.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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