Navigating the Florida Housing Market as a First-Time Homebuyer

April 27, 2023

Floridians have witnessed a home-buying rush over the last few years. Cities all over the state—from Miami to Tampa—saw increased prices and competition. These spikes in population drove the market's value up due to many switching to working remotely and wanting Florida's no state income tax, lower property taxes, and lighter regulations and restrictions throughout the pandemic.

Those who weren't ready to buy then are now facing inflation and higher interest rates, which have impacted housing costs by making it more expensive. This particularly affected first-time homebuyers in Florida. However, there are some things you can do to put yourself in a better position. Here's what to know.

Taking a Deeper Look at Florida's Housing Market

Florida saw a rise in new residents during the pandemic. However, there are other key factors contributing to the current situation in the housing market.

Low interest and mortgage rates in 2020 contributed to a hot housing market, which drove prices over the next few years. As a result, housing costs were up an average of 8.1% from 2021 to 2022 across the country. In many metro areas in Florida, those numbers were even higher.

Inflation also played a big role. As inflation rose throughout 2022, the Federal Reserve raised interest rates to help slow down demand. As a result, mortgage rates also increased over the same period.

In the last few quarters, corners of the market are showing signs of shifting. Inflation has fallen from highs and mortgage rates are ticking down. In Florida, homes sold over asking price are down significantly in 2023 and listings with price drops have also increased.

5 Strategies for First-Time Homebuyers in Florida

As a first-time homebuyer, consider some of these tips to help give yourself an edge in the home-buying process.

1. Get Your Financial House in Order

Your finances play a significant role in your ability to secure a residential mortgage. Review your finances and prepare key documents, including:

  • Your credit score. A high credit score can help you secure more attractive rates from your lender.
  • Proof of income. Providing tax returns and a current W-2 or 1099 will help show your financial health.
  • Financial documents. Statements from your bank, investments, and other assets help lenders see you have the funds for payments.

Having this information prepared can help you move through the pre-approval process more quickly.

2. Determine Your Budget

Review your income, expenses, savings, and spending as you prepare your budget to see what you can afford. It may help to ask the following questions:

  • How much of the down payment do you have?
  • What monthly payment can you afford based on your current income and savings?
  • Do you have funds for additional costs, such as property taxes, closing costs, and appraisals?

The answers can help you work out a budget. A mortgage loan calculator is another tool to help estimate payments. If you need any additional assistance please reach out to our specialized mortgage officers.

Contact a City National Bank of Florida Specialized Mortgage Loan Officer or email

3. Consider Different Loan Options

For some first-time homebuyers during high interest rate periods, an adjustable-rate mortgage (ARM) may be an option to explore. An ARM sets a fixed rate for 3 to 10 years. After that period, the rates may fluctuate.

If you plan to move or refinance in the next few years, for example, a shorter ARM may allow you to buy now and potentially secure a lower interest rate later (though it's not guaranteed).

If you have any questions regarding the different loan options available please reach out to our mortgage loan officers by visiting our website or emailing

4. Put Down a Larger Down Payment

Most first-time homebuyers average a 7% down payment. Saving for your down payment can help reduce your loan amount and the total interest paid over time.

Speak with your lender to learn how adjusting your down payment may change your estimated loan payments.

5. Explore Interest Rate Buy-Downs

A buy-down helps reduce monthly mortgage payments in the first few years by subsidizing the interest rate as part of closing costs.

For example, a home builder may want to attract buyers in a slow market. Rather than lowering the asking price, they offer to cover the costs of 1% of the interest rate for two years.

It reduces the buyers' interest rate for a few years, and the seller pays the equivalent fees up front during closing. After the buy-down period ends, the mortgage payment increases.

Work with Experienced Lenders

Buying your first home is an exciting experience, yet sometimes it can feel overwhelming. However, working with a local lender that personalizes the process makes a difference by offering more flexibility to meet your needs.

Our team at City National Bank of Florida will learn about your financial needs and guide you through the process step-by-step to help raise your rate of success.

The residential mortgage team at City National Bank is here to help first-time homebuyers in Florida. Visit our site to start your residential mortgage application process. Or email for more information.

Please note:  The content in this article comes from individual opinions and experiences. The content should not be taken as advice coming from City National Bank of Florida. City National Bank of Florida does not offer tax, legal or accounting advice.

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