Lower Mortgage Rates Mean More Eligible Buyers in Ohio
By Melissa Dittmann Tracey
The latest drop in mortgage rates is opening the door for thousands of additional Ohioans to qualify for a home loan—many of whom were priced out when rates hovered near 7% a year ago. With rates falling to more than three-year lows in early March, housing affordability is improving, and buyer sentiment is on the rise.
A recent survey by HomeServe of roughly 1,000 U.S. adults found that about 60% feel more optimistic about the housing market since rates fell in early March, with 25% feeling “much more optimistic.”
Nadia Evangelou, principal economist at the National Association of REALTORS®, called a recent drop in rates—even below 6% at the end of February—a “big psychological and financial milestone” for the housing market. On a $400,000 home, a rate of about 6% translates to a monthly mortgage payment of about $1,910—roughly $2,000 in annual savings compared with last year.
According to NAR’s Metro Market Dashboard, a drop in rates from 7% to 6% translates to an additional 5.5 million households nationwide who can now qualify for a mortgage—including 1.6 million renters who could become first-time buyers.
How Ohio Markets Are Affected
For real estate professionals in Ohio, the drop in mortgage rates may be an opportunity to engage new buyers, particularly first-time buyers and those previously priced out by higher rates. For example, markets like Dayton, Mansfield and Youngstown may see the largest uptick in prospective buyers who now qualify for a mortgage due to recent drops in mortgage rates.
Here’s a look at some of the Ohio metros where lower rates are translating to more qualified buyers and could lead to potentially higher home sales.
|
Metro |
Increase in Qualifying Households* |
Additional HouseholdsWho Qualify |
Additional Home Sales |
Share Qualifying at 6% |
|
Cincinnati, OH-Ky.-Ind. |
4.6% |
42,801 |
4,280 |
54.6% |
|
Cleveland-Elyria, OH |
4.9% |
43,215 |
4,322 |
56.6% |
|
Columbus, OH |
4.7% |
41,431 |
4,143 |
49.8% |
|
Dayton-Kettering, OH |
5.7% |
20,153 |
2,015 |
59.5% |
|
Akron, OH |
4.3% |
12,750 |
1,275 |
58% |
|
Toledo, OH |
4.6% |
12,643 |
1,264 |
60.9% |
|
Youngstown-Warren-Boardman, OH-Pa. |
5% |
11,651 |
1,165 |
62.2% |
|
Canton-Massillon, OH |
4.3% |
7,317 |
732 |
54.2% |
|
Springfield, OH |
3.9% |
2,183 |
218 |
62.8% |
|
Mansfield, OH |
5.6% |
2,835 |
284 |
58.9% |
*Share of households able to qualify with a 1% decline in mortgage rates (from 7% to 6%).
