Softening Miami Real Estate Market Could Lose Foreign Investment

The Miami real estate market thrives on foreign investors, from small time buyers who purchase vacation homes or flip properties to those investing thousands to millions in mortgage-backed securities. For the past five years, mortgage-backed securities have been very popular because they were deemed “safe and attractive.” But now that interest rates are rising, fewer mortgages are being written and the Miami real estate market is threatened with becoming sluggish, a lot of money that was poured into mortgage-backed securities may now go elsewhere.

Higher mortgage rates are dampening Miami real estate demand, which in turn is softening construction activity and mortgage lending. Besides seeing Miami real estate prices weaken, low demand could also produce a cut in jobs within the real estate industry and related industries, such as banking and construction.