The sharp rise in mortgage rates so far appears to have had little impact on the Columbus-area housing market.
While sales are slightly off as prices jumped nearly 15% in April, homes still sold in 13 days on average, suggesting that demand remains as strong as ever.
Columbus-area homes sold in April for a median of $334,092, up from $291,900 last April, continuing the blazing run-up in prices over the past two years.
“Buyers are still out in force and the market is as competitive as ever,” said Dan Handy, an economic analyst with Zillow.
Still, Handy and others expect rising mortgage rates to eventually soften demand for homes.
The average 30-year mortgage rate stood at 5.25% this week, down slightly from the last week but still more than 2 points higher than at the start of the year, according to the federal mortgage agency Freddie Mac.
Columbus-area home sales are down 1.1% this year compared with last, but most experts attribute that to a severe shortage of homes on the market, not interest rates.
April’s home sales report did, however, contain one hint that interest rates might be starting to chip away at demand. So far this year, buyers have purchased 80% of Columbus-area homes on the market, down from 83% the previous year.
As a result, the number of homes listed was up nearly 12% at the end of April compared to last April.
“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, this year’s president of the Columbus Realtors trade group.
Rising interest rates and home prices have combined to push up the mortgage payment alone on a typical Columbus-area home by nearly $500 a month.
Such hikes will eventually weigh on the housing market, experts predict.
“There’s likely going to be some rebalancing in the months ahead as more sellers show they cannot be quite as ambitious in their pricing strategy – there’s been a recent rise in the share of listings with a price cut – and as more inventory comes onto the market,,” said Zillow’s Handy.
“Both would be welcome signs to prospective buyers looking for a more level playing field.”