Traditionally, with the approach of Thanksgiving, the housing market slows as both buyers and sellers reflect on the holidays. However, observing a longer data history, this is by far the biggest seasonal slowdown seen in many years.

With a few exceptions, the number of days houses sat on the market increased along with active inventory throughout the region. And prices remained high.

“The monthly supply of inventory in the region increased to 3.5 months,” observed NEFAR President Diana Galavis, noting there was a 19% increase since September. “Overall, the Northeast Florida market is strong with the sales median holding with very little change.”

Even with the increase in inventory, the region still has a way to go before it can be considered a buyers’ market, where six to seven months of inventory is for sale. One thing is for certain, homes have never been so expensive in Northeast Florida. The region’s Home Affordability Index for single-family homes slid 4.5% to 63, registering at an all-time low.

The Housing Affordability Index measures housing affordability for the region. In other words, it measures whether a typical family earns enough to qualify for a mortgage on a typical home, based on current interest rates, median income, and median home prices.  A higher number means greater affordability.  This index measures affordability factors for all homebuyers making a 20% downpayment. An index of 100 is defined as the point where a median-income family has the exact amount of income needed to purchase a median-priced existing home. An index value over 100 means that the family has more than enough income, while a value below 100 means that a family doesn’t have enough income to qualify for a mortgage loan.

The high cost of housing has a lot to do with high-interest rates, Galavis said.

“Interest rates reached the highest levels in October,” she said. “Buyers were cautious and took a little longer to make offers, which reflected in higher median days on the market. Closed sales slid down. The home affordability index had a slight dip. The cost of goods, services, and borrowing money is much more expensive today than a year ago,” Galavis explained.  “Buyers are pausing to see which direction the Federal Reserve, stock investments, and the real estate market will move.”

NEFAR’s market reports are available at nefar.com.