About 1,500 Dayton-area homes were sold in September, an 11% drop from the time last year. Meanwhile, the average sales price increased by 7% compared to last year to $238,000, Dayton Realtors, a local trade association, reported.
But despite the changing market, there are still people looking to buy homes in the Dayton area, said Dayton Realtor President Billie Duncan-Hart.
“The houses are still selling. They might be taking a little bit longer than in the summer and than in the spring, but the inventory is still low and I think that is driving the prices up,” Duncan-Hart said.
She said she has worked with clients who have been looking for a home for several months and have watched as mortgage rates climbed, but noted that there are still many benefits to owning a home compared to renting including building equity with payments.
The hyper-active market over the last two years has been tough on buyers, Duncan-Hart said, who were constantly being outbid and having to make quick decisions or risk losing out. The new, calmer market might give more buyers a chance to get the house they really want.
“This past spring, it was nothing for me to write five to eight contracts for the same buyer because we kept getting outbid,” Duncan-Hart said. “So we are not in that market anymore and back to where it used to be where a house goes on the market today and it may not go sell-pending for two or three weeks so it gives buyers an opportunity to go in and go through it and put in an offer without having to make a split-second decision.”
The number of homes sold in Ohio fell 15% in September this year compared to last year, the Ohio Realtors reported. Meanwhile, the average sale price in Ohio reached $260,000 which was a 7% increase compared to September 2021.
“The Ohio housing marketplace is undoubtedly undergoing a shift, as rising interest rates is resulting in a reduced pace in sales activity among would-be buyers,” said Ohio Realtors President John Mangas said in a statement. “We are experiencing an uptick in homes listed for sale in many areas, which should expand housing opportunities as we return to a more balanced, stable market condition.
“The continued rise in average sales price reflects an understanding among consumers that housing in Ohio is a smart, long-term investment,” Mangas said.
Higher mortgage rates reduce homebuyers’ purchasing power, resulting in fewer people being able to afford to buy a home at a time when home prices continue to climb, albeit more slowly than earlier this year. The combination of higher rates and home prices means a typical mortgage payment for a homebuyer is up hundreds of dollars compared to what it was earlier this year.
The last time the average rate was above 7% was April 2002, a time when the U.S. was still reeling from the Sept. 11 terrorist attacks, but six years away from the 2008 housing market collapse that triggered the Great Recession.
Meanwhile, some homeowners have held off putting their homes on the market because they don’t want to jump into a higher rate on their next mortgage.
The interest rate hike has presented challenges to people looking to buy homes in the Dayton area, said Joshua Todd, the Director of Real Estate Lending for Day Air Credit Union.
“You have a double whammy of higher rates and higher prices,” he said. “There is still limited inventory in the housing market and those two factors are kind of a double whammy for our target audience which is low-to-moderate-income borrowers who are looking to buy a house and get a new home.”
Todd said even though sales have dipped, prices for homes are still expected to increase over time and it’s important for someone thinking about buying a home to consider opportunity costs.
“We’re telling folks that it may be your forever home but maybe it’s not your forever loan,” Todd said. “Maybe you don’t like 7%, but in a couple of years you will probably have a good chance to refinance that to a lower rate.”
The Associated Press contributed to this story
By the numbers
7% - Average US mortgage rate
1,470 - Dayton-area homes sold in September
$238,039 -Average sales price in Dayton area
$260,232 - Average Ohio home price
Source: Dayton Realtors, Ohio Realtors
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