As the buzz of homebuyers grows louder in locales around the country this fall, pending home sales have continued falling in many major Florida metropolitan areas.
Several major Hurricanes colliding with the ‘Sunshine State’ in recent weeks – most notably, Helene and now, Milton — put a damper on market demand.
Among the 50 most populous U.S. metros, pending home sales dropped the most drastically year-over-year in West Palm Beach during the four weeks ending Oct. 6, a new report from Redfin revealed.
Pending sales there fell 17.6%, followed closely by Tampa, (-15.5%) Miami, (-14.8%), and Fort Lauderdale (-12.8%). The fact the top four metros where sales declined the most were in Florida is in part due to Hurricane Helene, which made landfall Sept. 26. Before Milton, it became the deadliest hurricane to breach the mainland U.S. since Katrina, according to the U.S. Department of Homeland Security, causing billions in destruction.
But the housing demand has weakened along Florida’s coastline for a longer duration than just the 2024 Atlantic Hurricane Season. Buyer interest and home purchases have been falling for a while, as homeowners insurance and HOA costs skyrocket due to increasing climate disasters.
Most private insurance companies don’t even carry flood insurance, and many companies have stopped selling policies altogether in Florida. The National Flood Insurance Program run by the Federal Emergency Management Agency (FEMA) is now the primary provider of residential flood coverage, offering up to $250,000 for single-family homes and $100,000 for their contents, according to the Associated Press.
However, most of the $48 billion in property damage caused by Hurricane Helene alone was uninsured, a Realtor.com report found.
Outside of the southeastern U.S., pending home sales increased in 32 of the 50 most populous U.S. metros analyzed by Redfin the four weeks ending Oct. 6.
Buyers came out of the woodwork following the Fed’s interest rate cut in late September, driving this increase. Although mortgage rates have fluctuated in the weeks since, they are still significantly lower than they were a year ago and earlier this year.
“House hunters are monitoring mortgage rates closely, but so far, the increase in rates isn’t slowing buyers down,” said Shoshana Godwin, a Redfin Premier agent in Seattle. “I’m advising buyers to make an offer if they love a home; don’t try to time the market. Rates have swung down and then up over the last few weeks, and we don’t know exactly what will happen in the next few weeks. A buyer may lock in a slightly higher rate now than they would have two weeks ago, but if they wait, it’s possible rates will increase more. It’s also possible rates drop more significantly, which could heat up competition.”
Nationally pending home sales rose 2% from a year earlier – the largest increase in three years. Mortgage-purchase applications rose 8% month over month across the U.S., and new listings, by 5.7% year-over-year.
The largest annual increases took place in Phoenix, (14.1%) Seattle, (12.3%) San Jose, CA, (11.6%) San Antonio, (11.6%) and Virginia Beach, VA (11.2%).
