Interest Rates and Home Prices
Let’s talk about interest rates...
They might seem scary as they seem to have gone up 2-3%. But in reality they are just going back to normal. Interest rates used to be in the 5-6% rate before they went down. We expected it to go back up for some time and it now has. We got too comfortable sitting at the 2-3% rate, so when it went back to 5-6% rate, people were shocked. That being said, there is talk of a recession or a crash . People are scared of a crash in the market if these rates become too high.
According to the Central Ohio Housing Report, “Thus far in 2002 (January through April), buyers are purchasing 80 percent of the homes available, down from 83.2 percent in 2021, leaving inventory 11.6 percent higher than last spring, but still well short of the inventory we need to meet the demand of our growing region.”
The correlation between interest rates and home prices do not relate. The history with these 2 is that the correlation is weak. In the graphic it shows price growth happened before the price of interest rates were raised.
According to Ohio Realtors, Homes sales in April 2022 reached 12,803, a 2.5% a decrease from the 13,135 sales recorded during the month a year ago. The average sales price across Ohio in April reached $257,486, a 9.3% increase from the $235,573 mark posted during the month in 2021.
The average sale price of a home in Ohio April 2021 was $291,900. In April of 2022 it was $334,092. This is a + 14.5% change.
The inventory of homes for sale in Ohio April 2021 was 1,939. In April of 2022 it was 2,163. Leaving it to a +11.6% change.
The number of new listings in Ohio April 2021 was 3,619. In April of 2022 it was 3,620. With a very little change it comes to + 0.0% change.
Focus on the facts, not the media.
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