Florida’s Migration Boom Is Cooling — 5 Ways Younger Homebuyers Are Feeling the Pinch
Sure, home prices have cooled slightly in Florida over the last year. But that doesn’t make it easy or affordable for young homebuyers to live there.
“Net migration to Florida has fallen by roughly 93% from its 2022 peak, but affordability remains stretched because all the other costs of ownership have skyrocketed,” said Jon Brooks, housing analyst with Momentum Realty. One of the major reasons inbound migration slowed from a flood to a trickle is, of course, these affordability challenges.
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Here’s how younger homebuyers are feeling the pinch in the Sunshine State — and how you can give yourself some extra breathing room.
1. Soaring Insurance
Florida homeowner’s insurance premiums have exploded 79.1% since 2020, according to data compiled by Unlock economist Skylar Olsen and charted on Tableau.
Worse, standard homeowners policies don’t cover flooding. Double check that properties don’t lie in a flood zone, because they’ll require separate flood insurance.
“Florida insurance policies have jumped due to catastrophic loss history, carrier withdrawals from Florida and increased reinsurance costs as worldwide storm losses continue to rise,” explained Brad Spurgeon, insurance agent with Brad Spurgeon Insurance Agency Inc.
2. Property Taxes
After homes surged in value during and after the pandemic, assessments and property taxes are now catching up. Olsen calculates that Florida property taxes are up 24.7% since 2020 and that still leaves plenty of room for them to rise further when you buy.
Remember, you won’t necessarily pay the same tax bill as the seller. The county can reassess the property value based on your purchase price, causing your tax bill to leap. Calculate your future tax bill yourself, multiplying the local tax rate by your potential purchase price.
3. Condo and HOA Dues
After a condominium building collapsed in Surfside, Florida, in 2021, the state passed new laws governing condo inspections and requirements.
“After Surfside the state made older buildings fund reserves and do structural inspections,” said Li Bensimon, Florida Realtor with The Carroll Group. “But now a young buyer grabs a ‘deal’ on an older unit and a few months later boom, they get hit with a special assessment for $30,000. Read the condo association reserve study and ask what assessments are coming before you fall in love.”
4. Mortgage Rates
As of July 23, Freddie Mac put the average 30-year mortgage rate at 6.58%. That’s more than double the 3.22% that buyers paid in early January 2022.
For context, that means paying an extra $776 per month in interest alone on a $400,000 mortgage.
5. Maintenance and Repairs
Home maintenance and repair costs have also soared in recent years, driven higher by inflation and tariffs. Olsen at Unlock calculates that Florida homeowners spend 38.4% more today than they did in 2020.
“Even for people who can handle DIY projects, cost of materials is a real issue,” said Olsen’s colleague Michael Micheletti at Unlock. “As a general rule of thumb, budget at least 1% to 3% of the home's purchase price per year for upkeep.”
If young homeowners in Florida have one advantage right now, it’s that many cities are experiencing a buyer’s market. Over 75% of homes in Florida are selling under asking price, according to Zillow, and homes are sitting on the market for an average of 46 days.
Press your advantage, negotiate hard and save money where you can — because the other homeownership costs in Florida show no signs of abating.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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