MIAMI — Miami-Dade County total home sales outperformed its pre-pandemic totals as single-family home inventory rose for the fourth consecutive month in August 2022, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“The Fed’s efforts to tackle inflation has resulted in higher mortgage rates and a heightened sense of economic uncertainty which has served to moderate Miami’s record-breaking real estate market,” MIAMI Chairman of the Board Fernando Arencibia Jr. said. “Nevertheless, Miami sales remain higher than before the pandemic, median prices continue to appreciate, albeit at a slower pace, the region continues seeing wage growth and migration, and more single-family inventory is coming to the market.”
August 2022 Home Sales Outperform Pre-Pandemic Totals
When compared to a record August 2021, August 2022 sales decreased 24.1% year-over-year, from 3,299 to 2,505. August 2021 was the county’s best-ever August and 9th best-selling month.
August 2022 total sales outperformed Miami’s pre-pandemic August totals (Miami averaged 2,341 total homes sales in the month of August from 2016-19).
The Fed, which voted for another increase to the Fed Funds rate today, is intent on slowing 40-year high inflation. While the Fed doesn’t set mortgage rates, it affects them through its conduct of monetary policy. As a result, the 30-year fixed mortgage rate has fluctuated from 2.93% to 6.28% in the last 52 weeks, an unprecedented range of volatility.
September 2022 marks the sixth consecutive month of 5% or higher mortgage rates. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.22% in August, down from 5.41% in July. The average commitment rate across all of 2021 was 2.96%.
Housing is sensitive to rising mortgage rates. 2018 marked the last time mortgage rates hit 5%. Miami August 2022 total home sales finished 2.5% higher than August 2018 (2,505 vs. 2,444).
Beating its pre-pandemic sales total with rising rates and low inventory illustrates the depth of demand for Miami real estate. Local demand remains fueled by major companies such as hedge fund and securities firm Citadel moving to South Florida, the return of global buyers, demographic shifts with rising millennial homebuyer and senior populations, high percentage of workforce working remotely, surging rental prices and more.