Gov. Ron DeSantis takes steps to ‘help the average person’ afford a home: Real estate expert


With new home building permits down last month to their lowest levels since 2020, one real estate expert warned of a “double whammy” coming to the market that will price average Americans out of an affordable home – and applauded a Florida initiative attempting to fix the problem.

“It’s a double whammy. It’s the lack of demand and declining demand because buyers and consumers can no longer afford to buy what they could have bought last year, or they’re priced out of the market. And then on the development side, the credit markets are essentially freezing,” Peebles Corporation Chairman and CEO Don Peebles said on “Mornings with Maria” Tuesday.

Peebles’ comments come as new U.S. home construction slumped again in November as high mortgage rates combined with pervasive inflation continued to cool demand and the once red-hot housing market.

Housing starts slid 0.5% last month to an annual rate of 1.427 million units, according to new Commerce Department data released on Tuesday. Applications to build – which measures future construction – fell to an annual rate of 1.34 million units, a decrease of 11.2% from October. Permits for construction of single-family homes, which account for the biggest share of homebuilding, also dropped 7.1% to the lowest level since May 2020.

HOMEBUILDER SENTIMENT PLUNGES IN DECEMBER FOR 12TH STRAIGHT MONTH

Two key market factors triggered this demand destruction, according to the real estate expert.

Florida’s recently-passed property insurance legislation was a “very smart move” by Gov. Ron DeSantis, The Peebles Corporation Chairman and CEO Don Peebles said on “Mornings with Maria” Tuesday, December 20, 2022. (Getty Images)

“Right now, Americans, they’ve been hit by taking cash out of their pocket with out-of-control inflation, and now this extreme reaction of rapidly raising interest rates has taken away their buying power on the two biggest purchases that they’ll make in their lifetimes,” which Peebles argued are home and car purchases.

Peebles expanded on that idea, claiming a homebuyer with a $500,000 budget last year can now only afford to buy a $250,000 home – and there’s currently “nothing to buy at that price point.”

“The interest rates are pricing most people out of the market or they’re pricing them down to a product that they do not want to buy,” Peebles said, “and I think that that will continue.”

Last Friday, Republican Florida Gov. Ron DeSantis passed legislation aimed at fixing the state’s troubled property insurance system. The bill is seeking a $1 billion reinsurance fund, reduced litigation costs and to force some customers to leave a state-created insurer.

Florida has struggled to maintain stability in the state insurance market since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining companies fearful to write or renew policies in the state. Risks for carriers have also been growing as climate change increases the strength of hurricanes and the intensity of rainstorms.

“Something has to be done to these out-of-control insurance costs. But on the same hand, the carriers are absorbing massive risk – you’re taking a big risk to insure in Florida, you take a big risk to insure in California, especially anywhere there have been out-of-control fires,” Peebles reacted. “So I think that DeSantis, this move is going to be focused on trying to help the average person be able to afford to live in their homes.”

The real estate expert expressed the state of Florida had “no choice” but to intervene, claiming the pricey insurance costs would prevent people from moving there.

“Fewer people will move to Florida if they can’t afford their homes or they can’t afford insurance because the lenders are going to require it. Consumers are being hit very hard, so I think they have no choice,” he said. “If they don’t step in, then the taxpayers are going to have to pay for it in another way. I think that that was a very smart move.”

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Peebles called for other states to take Florida’s lead and predicted a housing “recovery” once inflation is under control.

“If you look from a governmental perspective, there’s no real policy on how we’re going to address some of these things. Americans need homes. They need a place to live,” the Peebles Corporation CEO said. “We are short in every major market with regards to housing and you’ve got an affordable housing crisis as well in most of the major cities in the country.”

READ MORE FROM FOX BUSINESS

FOX Business’ Megan Henney and The Associated Press contributed to this report.



Source link

Comments are closed.