Is it a good time to buy a house in Orlando?

Yes. While it’s still technically a seller’s market in Orlando, buyers have much more leverage in 2023 compared with the previous two years. There is a significantly larger number of homes for sale now, and the typical home sells for slightly less than listing price, according to figures from Redfin.

How much money do you need to buy a house in Orlando?

The median price of a home in Orlando is $358,000. If you have excellent credit, you might qualify for a conventional loan that requires a down payment of just 3 percent, which would come to $10,740. But most loans require a higher down payment, and anything below the standard 20 percent — more than $70,000 on a $358,000 home — will require paying for private mortgage insurance. You’ll need to budget for closing costs, too, which in Florida average 2.3 percent of the purchase price: that’s another $8,050.

Are home prices rising or falling in Orlando?

Overall, home prices have started to fall in Orlando. The median price in February was $358,000, according to the Orlando Regional Realtor Association — that price tag is slightly up from January’s $350,000, but before that the market saw three straight months of price declines.

Buying a house in Orlando: A how-to

Written by

David McMillin,

Edited by

Michele Petry

Published on March 23, 2023 | 7 min read

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The outside of a large suburban home in Southern Florida

If you’ve been dreaming of buying a house in Orlando, 2023 might be the year to make your move. The city’s housing inventory increased by 140 percent between February 2022 and February 2023, according to the Orlando Regional Realtor Association, so you will have many more options to consider — though of course, mortgage rates are higher now. Here’s everything you need to know.

Steps to buying a home in Orlando

Choose the right location

The greater Orlando metro area is massive — more than 4,000 square miles — so the first step to finding the right home here is choosing a neighborhood that meets your needs. Are you a single first-time homebuyer looking to build equity? You might start your search downtown with a condo in the new Creative Village district or with vintage charm in Lake Eola Heights. Are you looking for a backyard for your kids to enjoy? Suburban options nearby include Sanford, Apopka and Winter Garden. If you want to be further from the center of Orlando, check out Kissimmee, one of Bankrate’s best places to live in Florida. And don’t forget to consider your potential commute to work (theme park traffic can be tough!).

Find an Orlando home for your budget

As of February 2023, the median price of an Orlando home is $358,000. That’s a relatively affordable entry point, below the national median of $363,000. But you’ll need to spend a lot more if you’re looking in a luxury area like Windermere or Belle Isle.

To determine how much house you can afford in Orlando, the most important ingredients are your credit score and your debt-to-income ratio. The best mortgage terms are reserved for borrowers with scores of 740 and above, so it’s smart to work to improve your credit score before talking to lenders.

Look at your finances to determine how much money you can contribute to a down payment, too. The average down payment in Florida was $50,000 in 2022. You don’t necessarily have to put that much money down, but the more you pay upfront, the less you have to borrow — and the less you borrow, the less you pay in interest. Plus, if you put down less than 20 percent of the purchase price, you’ll likely need to pay for private mortgage insurance.

You’ll also want to get preapproved for a mortgage. While it’s not an official sign-off on a loan, it’s a critical step: Your preapproval letter will show sellers that you’re a qualified buyer, and that they should take your offer seriously.

See if you qualify for some help

Orlando homebuyers have several options for financial assistance. The state of Florida has programs designed for first-time homebuyers. On a local level, low-income borrowers who have not owned a home in the last three years may be able to score between $20,000 and $40,000 in down payment assistance from the city of Orlando. If you stay in the home for at least 10 years, you won’t have to pay the money back, either.

Find a local Orlando real estate agent

While you aren’t required to hire a real estate agent to buy a house, it’s smart to enlist the services of a pro to help navigate what can be a frustrating and confusing process. A good agent knows the market, listens to your must-haves and budget, and then helps you find properties that meet your needs. Plus, real estate agents have great networks of the other experts you’ll probably need to hire, such as attorneys and home inspectors, so they can recommend other trusted parties to simplify your homebuying journey.

Start house hunting and make an offer

With your agent by your side, you’re ready for the fun part: Finding a place to call your own. Homes are sitting on the market for an average of 62 days in Orlando, so you don’t have to feel rushed. You’ll also have a lot of inventory to consider: Housing supply here is up 140 percent since this time last year.

When you find somewhere that feels like a perfect fit, your agent will help you figure out how much to offer. Redfin data shows that homes are selling for slightly below list price here, so you may be able to negotiate to your advantage.

Be prepared

Once your offer gets accepted, the real work begins. After you’re in contract, you’ll hire a home inspector to identify any possible issues with the property. If there are major problems, you might be able to re-negotiate the price: According to Redfin, nearly 50 percent of sellers in Orlando agreed to offer concessions in the fourth quarter of 2022 — a signal of increased negotiation power for buyers. And if you’re taking out a mortgage, your lender will require an appraisal to verify that the house is worth at least the amount they’re loaning you.

Throughout the process, be ready for additional requests from your lender or your agent. It’s important to be responsive to keep your closing on track. And avoid making any major moves, like quitting your job or taking out a car loan. Lenders want to see stability from application to approval.

Should I buy a house in Orlando?

Florida is a very popular destination for people looking to relocate. Buying a house here now ultimately means beating the rush: The Orlando region is expected to welcome 1,500 new residents every week through 2030. That kind of sustained population boom typically translates to a steady increase in housing values, so you’re making a wise investment.

And while the city isn’t located on a scenic shoreline, that’s actually a good thing for property owners: Flooding risks here are much lower than in many other Florida cities, including Miami, Tampa and Fort Myers. And of course, if you’re a Disney fan, you can’t go wrong.

Tips for buying a house in Orlando

Be patient: The housing supply here now is higher than it’s been in ages, so take the time to consider your options. Homes are taking around two months to sell, so you don’t need to hurry.
Look at multiple lenders: Don’t just compare mortgage rates. Make sure you’re looking at multiple lenders in Florida and keeping a close eye on fees, which can have a huge affect on your closing costs. Look at loan estimates from at least three lenders to find a good deal.
Lock your rate: The Federal Reserve has continued raising rates this year, which means your borrowing costs could increase. If you find a rate that feels like a good deal, it’s wise to lock it in. Just keep in mind that locks have a limited length, so you’ll need to get moving on finding a home once you make the call to lock.

Important note about Florida homeowners insurance

The home insurance market in Florida is in crisis. Since 2017, many insurance carriers have left the state, gone insolvent or tightened their underwriting restrictions, making it difficult for homeowners to find coverage. Many of the companies that remain have chosen not to renew existing policies, leaving owners in the lurch.
Fraudulent roofing claims are mostly to blame, and the devastating effects of Hurricane Ian in September 2022 complicated the issue further. According to a report from the governor’s office, Florida accounts for 79 percent of the country’s home insurance lawsuits.
New insurance-reform laws went into effect in 2022 to try to stabilize the situation, but it may be some time before these laws produce meaningful results, and homeowners could see premiums that exceed several thousand dollars a year. Before you buy a Florida home, consult closely with your real estate agent, and possibly a local attorney, to determine whether the property will be insurable at a cost you can afford.

FAQs

Yes. While it’s still technically a seller’s market in Orlando, buyers have much more leverage in 2023 compared with the previous two years. There is a significantly larger number of homes for sale now, and the typical home sells for slightly less than listing price, according to figures from Redfin.
The median price of a home in Orlando is $358,000. If you have excellent credit, you might qualify for a conventional loan that requires a down payment of just 3 percent, which would come to $10,740. But most loans require a higher down payment, and anything below the standard 20 percent — more than $70,000 on a $358,000 home — will require paying for private mortgage insurance. You’ll need to budget for closing costs, too, which in Florida average 2.3 percent of the purchase price: that’s another $8,050.
Overall, home prices have started to fall in Orlando. The median price in February was $358,000, according to the Orlando Regional Realtor Association — that price tag is slightly up from January’s $350,000, but before that the market saw three straight months of price declines.