Federal interest rate hikes impacting housing market

TOLEDO, Ohio — If you’ve been trying to find a house, you know the U.S. housing market has been hot for a little over a year, with demand outpacing available homes and some buyers having to pay well over asking price just to give a competitive offer.

“Right now what we’re seeing is that some buyers have decided to take a small break due to the frustration they had with their purchasing experience back in 2021,” real estate agent Eddie Campos said.

According to RE/MAX data, the entire northwest Ohio region – from Toledo down to Lima – only has some 780 homes for sale total; a product of this rabid demand. However, that demand is easing.

Campos says with recent interest rate hikes from the fed looking to target inflation, home sales are already down 7% in Lucas County and this summer’s market should begin to look a little different.

“Last year we were seeing homes that would have anywhere from 20 to 30 showings on the first day, I think what we’re seeing so far this year is we’re still having a good opening day for our homes, so we’re seeing 10 to 15, which is probably more realistic for a home in great condition,” Campos said.

Campos says rising interest rates and low inventory may keep some buyers out of the market. 

He says if you’re looking for a move-in-ready home, there will still be top-dollar demand for such a property. But he says if you don’t mind putting on a coat of paint or stripping some wallpaper, these changes might mean it’s time for you to pull the trigger.

“Those people, they’ll probably be able to still buy a home at list price, maybe a little bit of a discount, and still have themselves a great home,” he said.

However, Campos warns these changes might also affect people’s pre-approval as they try to buy a home.

“Now that the interest rates have changed, it would be considered that they’re not pre-approved, they just may not be pre-approved for the same amount,” he said. “So going back to what I said earlier, instead of being pre-approved for a $200,000 home, it may be $150-or $175-[thousand] now.”