Florida homebuyers obsessing over interest rates may be missing opportunities to build equity, according to a veteran broker who argues the focus on rates over prices could prove costly in the long run.
“I don’t think they’re going to see the prices go down,” says Garrett Decker, Broker Associate at NextHome At The Beach. “I think it’s more of everybody stills like all the interest rates, they’re going to come down. And the problem is, if interest rates come down low enough, home sellers are going to raise their prices.”
The Rate Fixation Problem
Decker, who serves markets from Flagler County through St. Johns and Duval, sees a concerning pattern where potential buyers delay purchases waiting for lower rates, potentially missing opportunities in current market conditions.
“I always tell people buy now, when the prices are where they’re at, and if the interest rates come down, you can always refinance later on,” Decker explains. “I think people are still stuck around this interest rate mindset, instead of the home price and the equity that they can be building.”
This fixation on rates comes as Florida markets show increasing inventory levels. St. Johns County has seen an 18% year-over-year increase in active listings, while Volusia County reports over 3,500 active homes for sale. Yet closed sales have dropped in many areas, suggesting buyers remain hesitant despite growing options.
Market Dynamics and Competition
The current environment presents unique challenges for both buyers and sellers. New construction accounts for roughly 30% of home sales in many areas, with builders offering aggressive incentives including closing cost assistance and rate buydowns.
“These builders are offering closing costs incentives, they’re offering lower interest rates on the mortgages and existing homes can’t compete,” Decker notes. This competition from new construction adds another factor buyers must weigh against their rate concerns.
For sellers, the situation creates frustration. “They obviously don’t want to have to drop their prices,” Decker says. “Real estate is more stressful than being a cop and trying to convince people, and not even convince people, it’s more information, informing them of what the numbers say and what the market says.”
Alternative Solutions
Rather than waiting for perfect market conditions, Decker advises buyers to explore alternative paths to homeownership. He highlights a range of assistance programs offered at both the state and county levels that can help bridge financial gaps. These include down payment assistance programs for first-time buyers, the Hometown Heroes program, and benefits provided through the Live Local Act.
Additionally, county-specific initiatives, such as the State Housing Initiatives Partnership (SHIP) program, can provide targeted support tailored to local market needs. Decker emphasizes that understanding and leveraging these resources can make the difference between delaying a purchase indefinitely and securing a home sooner.
“There’s mortgage programs out there to help people,” Decker explains. “Each county and city may have a ship program or a different benefit program for you, and so it’s just educating these people.”
Looking Forward
For investors and buyers well-positioned to act, Decker sees opportunities in certain market segments. “Palm Coast is one of the best areas right now that, in my mind to invest in for short term rentals or rentals in general,” he notes, citing less restrictive regulations compared to surrounding areas.
His advice for those considering a purchase: “Make an offer, see what they say. The worst thing they can say is no.” This approach, combined with understanding available assistance programs and the potential for future refinancing, may prove more beneficial than waiting for perfect rate conditions that could coincide with higher prices.
The message is clear: while interest rates matter, fixating on them to the exclusion of other market factors could mean missing valuable opportunities to build equity and establish homeownership.
