The average 30-year fixed rate for a mortgage is now over five percent. This can greatly impact the affordability for first-time homebuyers trying to get into the real estate market. Their buying power is decreased approximately 10 percent for every one percent increase in interest rates.
If you are looking to purchase a home for the first time, don’t be discouraged by these numbers, reach out to us and we’ll help you devise a plan to reach your home ownership dreams.
RISING INTEREST RATES ESPECIALLY CHALLENGING FOR FIRST-TIME BUYERS
Rising interest rates, lack of available homes and a decade of underbuilding are taking their toll on central Ohio housing activity as home sales have slowed in 2022 compared to the record-breaking pace set in 2021.
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 average 30-year fixed rate for a mortgage is now over five percent, up from just over three percent late last year and the highest since 2009.
“Even though we have more homes for sale today than a year ago, rising interest rates are preventing some buyers from making a move right now,” said Sue Van Woerkom, 2022 president of Columbus REALTORS®.
“For every one percent increase in interest rates, your buying power decreases by about 10-11 percent. And this is especially challenging for first-time home buyers.”
The average age of a first-time home buyer in central Ohio today is 31 years old and they purchase 38 percent of the homes sold.
Statewide, first-time buyers today tend to be 35 years old and represent 37 percent of Ohio sales, Nationally, this home buying segment is 33 years old, purchasing 34 percent of the homes sold.
The median price of a home sold in central Ohio this year ($270,419) marks a 12.7 percent gain compared to the price of homes sold during the first four months of 2021.
The median price a first-time home buyer is paying in central Ohio is around $218,000.
“Central Ohio is a top metro area for young professionals,” adds Van Woerkom. “Almost 16 percent of our population is age 25-34 and are, or will be, looking to purchase a home.”
“To accommodate them, we need more home owners to become home sellers. Moving up – or transitioning to another type of living style such as a low maintenance home – is how we help get our first-time buyers into homes and on the first rung of the ladder to economic wealth building.”
Columbus REALTORS® is comprised of almost 10,000 real estate professionals engaged in residential sales and leasing, commercial sales and leasing, property management, appraisal, consultation, real estate syndication, land development and more.
The Columbus REALTORS® Multiple Listing Service (MLS) serves all of Franklin, Delaware, Fayette, Licking, Madison, Marion, Morrow, Pickaway and Union Counties and parts of Athens, Champaign, Clark, Clinton, Fairfield, Hocking, Knox, Logan, Muskingum, Perry and Ross counties.