High interest rates, low inventory lead Columbus home sales to drop for 15th month


High interest rates and a shortage of homes for sale continue to take their toll on the central Ohio housing market, which saw sales drop in August for the 15th straight month.

During the month, 2,876 central Ohio homes changed hands, down more than 10% from 3,215 sales last August, according to the Columbus Realtors trade association. For the first eight months of the year, sales are down 15.4% from last year. Sales of Columbus-area homes have now fallen every month since May 2022.

A shortage of homes on the market, however, has kept prices climbing. The median sales price of a central Ohio home in August rose to $316,995, up 7.5% from $295,000 a year ago. For the year, home prices are up 5% in the Columbus area.

More:Some Franklin County neighborhood property values triple. Where did they rise most?

Nearly 3,300 central Ohioans hung a for-sale sign in front of their homes in August, up from July but below a year ago. Despite that year-over-year drop, the overall decline in sales has helped the number of central Ohio homes on the market climb 19% since June.

“Beautiful new homes are coming on the market daily in central Ohio,” said Columbus Realtors President Patti Brown-Wright in a news release. “We are seeing positive trends in inventory, but interested buyers should not be lured into complacency. Multiple offers are still the norm in Columbus.”

Demand remains high for homes in central Ohio, as evidenced by Realtor.com naming Gahanna the hottest market in the nation this year.

But interest rates continue to dampen the market, keeping renters in apartments and homeowners on their couches, reluctant to abandon their 3% mortgage for one twice as high. The average 30-year mortgage rate, at 7.19% this week, has remained above 7% for more than a month, a point higher than a year ago and up from 3% two years ago, according to the federal mortgage agency Freddie Mac.

“Sustained affordability challenges in this market have continued to take a toll on existing homeowners and potential homebuyers,” said Zillow Senior Economist Nicole Bachaud in a news release. “Rate lock is still in effect with current mortgage rates sitting above 7% and the majority of outstanding mortgages sitting under 4%, limiting the willingness and ability of existing owners to list their home.”

More:Five numbers to know about Columbus real estate in 2023

Nationally, home sales fell to the slowest pace since January. And statewide, sales fell 17%, led by a big drop (33%) in Cincinnati and drops in smaller markets including Athens and Lancaster. Those two cities, however, also saw the biggest price jumps in the state, providing more evidence that a lack of inventory, not demand, is depressing sales.

“August’s home sales reflect market dynamics of higher mortgage rates and lower inventory,” said Ohio Realtors President Ralph Mantica in a news release.

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