ST. PETERSBURG, Fla.  — Is now a good time to purchase a home in today’s economic climate?

As home prices continue to rise and mortgage rates fluctuate, many individuals are unsure about the future of the housing market and if now is the right moment to purchase a home.

That was one of several topics dozens of experts weighed in on at the Florida Housing Summit.

The Florida Policy Project hosted the summit, entitled “Blueprint for Better Outcomes,” and welcomed several members of the community, policymakers, and housing experts to discuss the affordable housing crisis. Currently, the average rate for a 30-year fixed-rate mortgage stands at 6.81%, according to a recent report from Freddie Mac. In comparison, ten years ago, the same survey by the Federal Home Loan Mortgage Corporation indicated that mortgages averaged 3.63%.

It was then that Lauren Stern became a first-time homeowner.

“I bought a condo at 23,” said Stern. “And had a roommate who paid most of my mortgage at the time and was able to build equity.”

She sold her first home and purchased another in St. Petersburg during the pandemic.

“I owned a house in St. Pete that has a tiny home in the back. So I had rental income when I lived there,” she added.

According to a 2024 report by the National Association of Realtors, the average first-time homebuyer has reached an all-time high age of 38 years. This is three years older than the average in their last Home Buyers and Sellers report released in July 2023. Stern says she’s concerned that more of her peers don’t have the same experience. She worries that higher mortgage rates could put homeownership out of reach for some of her peers.

“They can't afford the down payment. And, really, credit is the biggest challenge for millennials when buying. And we've heard today and learned about the changes that occurred after the 2008 market crash, specifically how they tightened income requirements and became more lenient with credit. And pretty much anyone under 720 can't get any kind of mortgage. And that's really, really rough on millennials in their thirties that would typically already have owned a home in prior generations,” said Stern.

The Federal Reserve voted last Wednesday to keep interest rates steady for the third time this year. 

Analysts predict this means that the primary interest rate will remain near a record high for over a decade.

This affects the cost of borrowing money, including credit cards, auto loans, home equity lines of credit (HELOCS), and adjustable-rate mortgages.

Domonic Purviance is a subject matter expert with the Federal Reserve Bank of Atlanta’s Supervision and Regulation Division.

The Fed doesn’t directly control mortgage rates, although it certainly affects them.

 “The other thing that's driving mortgage rates is a potential payoff risk. So, if you are to invest in a mortgage today and someone has a 7% mortgage, what will that person do if rates go down? They're going to refinance that mortgage. So that's going to pay off the mortgage. And so because of that increased payoff, risk is spread between ten-year treasuries, and mortgage rates are much higher today than they would normally be. So that's one of the reasons why you see mortgage rates increase, even though the Fed has pulled back on monetary policy,” said Purviance.

Rising mortgage rates can lead to higher rents as they drive potential homebuyers to continue renting, which increases demand in the rental market. 

“There’s a lot of older participants here. So they’re sort of speaking about their millennial children,” said Stern. “If they’re talking about millennial concerns who are still living in the basement or renting or have to share. And, you know, it’s me with friends who have kids that are stuck in rentals. They’re stuck in the rental cycle.”

The Tampa Bay housing market is shifting from a seller's market to one that is more balanced or even favours buyers.

Although challenges such as elevated prices and mortgage rates persist, experts suggest that the rise in inventory and stabilising rates could create opportunities for financially prepared buyers.