Columbus home buyers have been dealing with below-normal home inventory for several years. Homeowners have been affected by low inventory as well, having little to choose from if they were to sell their current home. More recently, rising interest rates have made homeowners reluctant to sell and give up the low-rate mortgages they currently enjoy.
This leaves new construction as the best hope for improving Central Ohio’s home inventory. Unfortunately, home builder confidence took a hit as quick-rising rates impacted buyers and raised financing costs for builders themselves.
This is evidenced in the decline of single-family home building permit activity in Ohio. Data released by the National Association of Home Builders shows a 14% drop in Columbus home building permits year-to-date as of August 2023, compared to the same period a year ago.
Most of Ohio saw a reduction in single-family home building permits. Dayton Ohio permits fell 21%. Cincinnati permits fell 18%. Canton permits fell 17%, Cleveland fell 16%, and so on. The only area to see an increase in building permits was Toledo, which lined up 143 more permits this year compared to last year. Overall, Ohio has seen a double-digit decline in building permit activity statewide for 2023.
The National Association of Home Builders has been vocal about the impact of interest rate hikes on the industry. In a joint letter issued with the Mortgage Bankers Association and the National Association of REALTORS© to Chairman Powell on October 9, there is an excellent point: increases in housing costs are a leading source of inflation. Higher interest rates make housing costs more expensive and worsen the problem. This is a very simplified summary: you can read the exact wording at this link.
While the trade associations have found some sympathy among the Federal Reserve Board of Governors, many economists expect that interest rates may rise a bit further before leveling off. There is an expectation that rates may stay elevated well through 2024, unless an economic disruption forces the Fed to pivot.
In the meantime, waiting for lower rates, more home inventory, or an “easier” real estate market may not be realistic for Columbus home buyers. You cannot predict the future. But you can find opportunities today with the help of an Exclusive Buyer’s Broker!
As Exclusive Buyer’s Brokers, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services www.BuyersHome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
