The growing regional economy, producing jobs and higher wages, as well as solid migration into the Florida East Coast including Miami, should continue to drive the housing market to new heights. As the Federal Reserve attempts to fight the high pace of inflation, higher interest rates will lead to additional increases in purchase mortgage rates, constraining purchase power, particularly in the entry-level market. However, the decrease in refinance activity will lead to fewer renovations, likely driving some households to the trade-up market rather than remodel their current homes. After a record-breaking 2021, the regional housing market will face stronger headwinds in 2022, including elevated inflation that has already dampened consumer confidence and weakness in the stock market that could curb demand for homes. The pent-up demand for housing combined with income gains driven by a labor shortage should break through any headwinds and lead to another positive year for the regional housing market.
