Naples Real Estate Refinancings No Longer as Easily Available
Higher interest rates are finally starting to dampen demand for Naples real estate. Loss of demand will eventually cause the Naples real estate market to slow, which will in turn probably soften construction activity and mortgage lending. But what most Naples real estate owners worry about is that the market’s slowdown will stifle home price appreciation.
Over the past five years, the rapidly appreciating values of Naples real estate made refinancings and home equity loans easily available. “In a 2002 study the Federal Reserve found that the average household extracted $26,700 in equity with each refinancing.” Homeowners then used about one third of that extra cash to pay off old bills, but the rest was spent. Not only will a sluggish Naples real estate market cut off locals dependant on their home’s appreciation to pay off debt, but it will also reduce consumer spending.
Over the past five years, the rapidly appreciating values of Naples real estate made refinancings and home equity loans easily available. “In a 2002 study the Federal Reserve found that the average household extracted $26,700 in equity with each refinancing.” Homeowners then used about one third of that extra cash to pay off old bills, but the rest was spent. Not only will a sluggish Naples real estate market cut off locals dependant on their home’s appreciation to pay off debt, but it will also reduce consumer spending.
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