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Homes sales in Lucas and upper Wood counties in Ohio decreased by 5.4% in September, but the decline was expected, a local real estate official said.
“We normally see a bit of a downturn in the market between August and September, so it’s not a big concern,” said Doug Kwiatkowski, president of the Toledo Regional Association of Realtors.
According to new figures from the Realtors group, 526 homes were sold last month in the Toledo area.
Despite the drop in home sales last month, two other metrics continued their long-term trend: Home prices rose while inventory declined.
The median sales price last month rose 6.1% to $126,000 in metro Toledo, an area made up of Lucas County and parts of northern Wood County. The median means half of the homes sold for a figure above that sales price, and half sold for a figure below it.
The average home price was $155,018, up 3.5% from September a year ago.
Conversely, the number of active listings — or homes actively marketed for sale — dropped 5% to 2,320. The shrinking inventory helped to further decrease the days homes spend on the market before selling. Homes spent just 86 days on the market in September, a decrease of 1.1%, the Realtors group said.
“We still have people on the sidelines. Among my agents, they have about a dozen or so who have been waiting three to four to six months for the right house to come along and they just haven’t found it,” Kwiatkowski said.
Waiting inevitably will cost these homebuyers more money, he added, because mortgage interest rates have been increasing steadily.
In September the monthly average interest rate was 4.72%. That marked a 23.2% rise from September, 2017, according to data by the Federal Home Loan Mortgage Corp., also known as Freddie Mac.
“It’s amazing how interest rates will start affecting affordability. That’s the biggest thing we’ll see going forward,” Kwiatkowski said. “Interest rates have gone up almost a full point since [Donald] Trump took office,” he added.
The Realtors group president said he expects the rise in interest rates to affect home affordability, and it also could stall home prices.
“As the interest rate goes up, affordability plops down. This could slow the market down a little bit, which might not necessarily be a bad thing,” Kwiatkowski said.
However, it also might spur some buyers who are on the sidelines to purchase a home now before interest rates go up even further, he said.
According to estimates, a 1% rise in mortgage rates adds $239 more per month to payments on a $200,000 mortgage loan.
“I think interest rates will continue to go up,” Kwiatkowski said. “I think it will hit 5% next year. That’s my forecast.”
Tribune Content Agency