📘 Introduction

As mortgage rates and home prices continue to shape the U.S. housing market, many prospective buyers in Columbus, Ohio are asking the same question: when will it finally become more affordable to buy a home? Between fluctuating interest rates, steadily rising home prices, and a shifting economy, navigating the path to homeownership requires both planning and insight. This article examines the latest forecast models for mortgage rates through 2027, explores how these rates correlate with projected home prices in the Columbus market, and outlines what aspiring buyers will need to save for a down payment and closing costs. Whether you’re looking to buy in the next year or planning for the long term, this guide offers a data-driven roadmap tailored to Columbus’s local housing trends.

Below is an in-depth article on mortgage‑rate forecasts, home‑price projections, and affordability in Columbus, OH from 2025 to 2027.

📉 Mortgage Rate Forecast Models (2025–2027)

Multiple forecasts show a gradual easing:

• Fannie Mae (Mar 2025) expects 30‑yr fixed rates to finish 2025 at ~6.3%, drop slightly to 6.2% in 2026 (houzeo.com, noradarealestate.com, fanniemae.com).
• Norada Real Estate echoes a slow decline: mid‑6% in 2025, entering mid‑5% range by 2026–2027 (noradarealestate.com).
• Capital.com (Morningstar data) is most optimistic, forecasting 5.6% in 2026 and 5.0% in 2027 (capital.com).
• Forbes/NAR projects an average of 6.4% in 2025, easing to 6.1% in 2026, with no sub‑6% until mid‑2026 (forbes.com).

Forecast Summary

🏠 Home Price Outlook in Columbus, OH

Local forecasts suggest modest, steady price growth:

• Zillow (May 2025): avg. home value ≈ $254,800, up ~1.4% over the past year (houzeo.com, zillow.com).
• Houzeo reports a median of $270,000, slightly down YoY by 1.1%, but stable (houzeo.com).
• 10TV foresees a 4–6% price increase in 2025 (10tv.com).
• Fannie Mae projects national HPI to rise 4.1% in 2025, and 2.0% in 2026 (newsylist.com)—likely reflective in Columbus.

Projected Prices for Columbus

• July 2025: $270,000 × 1.04 ≈ $281,000
• July 2026: $281,000 × 1.025 ≈ $288,000
• July 2027: $288,000 × 1.025 ≈ $295,000

🔗 Correlation Between Rates & Prices

• Lower rates boost buyer demand, supporting continued—even if moderated—price growth.
• Gradual rate decline (mid‑6% → mid‑5%) keeps borrowing broadly affordable, sustaining prices.
• Any sharp rate drop could accelerate demand; conversely, persistent high rates moderate price growth.

💰 Down Payments & Savings Timeline (20% Down + ~3% Closing)

Needed: 20% down + 3% closing costs

• July 2025: 20% × $281K = $56,200; closing: ≈ $8,400 → Total ≈ $64,600
• July 2026: 20% × $288K = $57,600; closing: ≈ $8,640 → Total ≈ $66,240
• July 2027: 20% × $295K = $59,000; closing: ≈ $8,850 → Total ≈ $67,850

🎯 Savings Plan (starting July 2025)

Notes:

• Starting July 2025 savings now gives:
• 12 months → need ~$5,520/month
• 24 months → need ~$2,830/month

📌 Summary

• Mortgage rates: easing slowly from low‑6% in 2025 to mid‑5s by 2026/27.
• Home prices in Columbus: rising steadily—$281K → $288K → $295K across July 2025–27.
• Down payment + closing costs: ~$65K → $67.8K
• Savings goal: ~$2,800/month over two years to meet 2027 purchase.

🧾 In Closing

While mortgage rates are expected to gradually decline from the mid-6% range in 2025 to the mid-5% range by 2027, home prices in Columbus are projected to continue their upward climb—from an average of $281,000 in 2025 to nearly $295,000 by 2027. This means buyers will still face sizable down payments and closing costs, estimated to rise from $64,600 to nearly $68,000 over that span. For those planning to buy in 2027, a disciplined savings plan of approximately $2,800 per month starting mid-2025 can put home ownership within reach. Ultimately, while affordability may slowly improve with declining rates, early financial preparation remains the key to success in Columbus’s competitive market.

Final take: If you’re aiming to buy in 2027, plan for a mid‑5% mortgage, expect home prices near $295K, and start saving ~$3K/month now.

In the ever-evolving world of real estate, two major forces shape the cost of homeownership: mortgage interest rates and home prices. These two factors don’t exist in isolation—they influence each other and play a big role in whether it's a good time to buy a home. As a potential buyer, you may be asking yourself:

• Is it more cost-effective to buy when rates are lower?

• How do home prices react to changes in mortgage rates?

• Should I wait for lower rates or buy now?

• Is there a perfect “middle ground” that offers the best of both worlds?

Let’s explore these questions in plain terms.

1. Is It More Cost-Effective to Buy When Mortgage Rates Are Lower?

Yes, but… it depends.

Lower interest rates generally mean lower monthly mortgage payments, which can save you tens of thousands of dollars over the life of a loan. For example, on a $300,000 loan:

• At 3.5%, your monthly payment (excluding taxes and insurance) might be around $1,347.

• At 7%, that same loan might cost you around $1,996 per month.

That's a $650/month difference—huge for most buyers.

But here's the twist: when rates are low, more people want to buy. That increased demand can push home prices up, often offsetting your savings on interest.

2. How Do Home Prices Correlate with Mortgage Rates?

They often move in opposite directions.

• Low interest rates = more buyers = higher home prices.

• High interest rates = fewer buyers = pressure on prices to drop.

When borrowing is cheap, people jump into the market, and sellers can charge more. When borrowing gets expensive, demand softens, and sellers may have to lower their prices or offer incentives.

But the relationship isn’t always perfectly inverse—home prices are also affected by inventory, wages, employment, and location.

3. Should I Buy When Rates Are Higher or Lower?

It depends on your priorities.

• If you want a lower monthly payment: You’ll benefit from lower interest rates, even if the home price is a bit higher.

• If you want to build equity faster or get a better deal: You might consider buying when rates are higher, as there’s often less competition and more room to negotiate on price.

The biggest mistake? Waiting too long for the “perfect” time. If you're ready financially, stable in your job, and plan to stay in the home long enough, you can refinance later if rates drop—but you can't go back in time and buy a home that’s appreciated $50,000 while you were on the sidelines.

4. What Is the Perfect Median Between Mortgage Rate and Price?

There’s no exact formula, but let’s consider this general rule of thumb:

• For a $300,000 home:

  • At 6% interest, monthly payments are about $1,799.

  • If the home drops to $270,000 (a 10% discount due to higher rates) and the rate is 7.5%, your payment is still about $1,893.

In this scenario, your monthly cost is nearly the same—but you paid $30,000 less for the house. That’s money you’ve saved in purchase price, taxes, and possibly even insurance.

The “median sweet spot” is often found when rates are moderate (5.5%–6.5%) and prices are not at their peak. In these conditions, you’re less likely to face bidding wars and may have room to negotiate both price and seller concessions.

Final Thoughts

The best time to buy a home isn’t just about numbers—it’s about your personal finances, your goals, and the market where you’re buying. A slightly higher rate on a great deal may serve you better than a low rate on an overpriced home. And if you can comfortably afford a mortgage and are ready to plant roots, it may be smarter to buy now and refinance later.

If you're unsure where you stand, talk to a trusted lender or real estate advisor to analyze your local market—and remember, real estate is a long game. Buy wisely, and time will be on your side.

As President Trump introduces new tariffs on foreign imports, and as Columbus, Ohio, continues its impressive economic and population growth, the local housing market is being shaped by a mix of opportunity and uncertainty. Focusing on business growth, personal responsibility, and free-market dynamics—the signs are clear: this is a pivotal moment for buyers, sellers, and investors alike.

A Market in Motion

As of February 2025, the median sale price for a home in Columbus stands at $270,000—a modest dip of 1.5% from last year. Homes are selling in about 50 days, with multiple offers still common. Despite rising mortgage rates, Columbus remains a seller’s market, where demand continues to outpace supply.

Buyers may be feeling the pinch with 30-year fixed mortgage rates averaging around 6.936%, and 15-year rates at 6.032%. But compared to other major metros, Columbus remains relatively affordable—and attractive.

The Bigger Picture: Jobs, Tariffs, and Investment

President Trump’s strong tariffs on foreign imports aim to bring manufacturing back to U.S. soil. Critics worry about price hikes, but supporters argue it’s a strategic move to secure supply chains and strengthen national resilience—especially in a world increasingly shaped by geopolitical tension.

For Columbus, this couldn’t be happening at a better time. The region is welcoming transformative projects like the Intel chip plant and Anduril’s advanced defense facility. These investments are expected to create thousands of high-paying jobs, draw new residents, and spark demand for both commercial and residential real estate.

If tariffs increase costs in the short term, Columbus’ economic diversification and workforce growth could balance that out, creating a net positive for the city and its housing market.

What It Means for Buyers, Sellers, and Investors

Columbus is already experiencing:

• Steady Population Growth: Driven by job seekers and families looking for affordability and opportunity, migration into Columbus boosts demand—especially in suburbs.
• Limited Inventory: Despite new developments, housing supply remains tight. Sellers are in a strong position, especially in high-demand neighborhoods.
• Changing Demographics: Younger buyers, remote workers, and families are reshaping demand. Homes with office space, outdoor areas, and energy-efficient features are seeing increased interest.
• Interest Rate Pressure: Higher rates have changed affordability, but Columbus still offers value compared to cities like Chicago or New York. Buyers who act now could benefit long-term.

Areas of Focus in the Coming Months

1. Inventory Management: Local builders and developers should continue prioritizing smart growth to meet buyer demand without overbuilding.
2. Tariff Impact on Construction: If building materials rise in cost due to tariffs, developers and investors will need to factor that into pricing strategies.
3. Interest Rate Volatility: Rates may remain elevated for the foreseeable future. Strategic buyers and investors will factor this into cash flow and ROI models.
4. Long-Term Outlook: Given the massive job creation in the region, property values in Columbus—especially near Intel, Anduril, and other hubs—could see significant growth in 5–10 years.

Conclusion: Strong Fundamentals and Smart Timing

Despite some headwinds, Columbus’ housing market is underpinned by strong fundamentals. A growing population, expanding job base, and limited inventory continue to make it a market worth watching.

While tariffs and interest rates add complexity, they also create opportunity. For those who believe in entrepreneurship, innovation, and free-market investment, the Columbus real estate market is fertile ground. Whether you're buying your first home, investing in rentals, or looking to sell, timing and location will be key in navigating this evolving landscape.

Anduril Industries is making waves in Ohio with its plan to build Arsenal-1, a five-million-square-foot facility in Pickaway County near Rickenbacker International Airport. This isn’t just another factory—it’s the biggest job creation initiative in Ohio’s history, expected to bring 4,000+ new jobs by 2035. That’s a massive economic boost, and if history has taught us anything, it’s that where jobs go, real estate follows.

A Prime Opportunity for Real Estate Investors

With thousands of high-paying tech and manufacturing jobs coming to the area, demand for housing is set to skyrocket. Columbus has already been experiencing a tight housing market, and this influx of workers could push property values up even further. Investors looking for long-term growth should be paying close attention.

• Pickaway County & Rickenbacker Area: Right now, home prices are relatively affordable, but with Anduril’s arrival, expect steady appreciation over the next 5-10 years.
• Surrounding Columbus Suburbs: Areas like Groveport, Canal Winchester, and Ashville could see increased demand as new employees look for homes within a reasonable commute.
• Rental Market Growth: Not everyone moving for a job is ready to buy, meaning a strong potential for rental property investors.

Where Will Home Prices Be in 5-10 Years?

It’s tough to predict exact numbers, but looking at similar tech-driven booms in places like Huntsville, Alabama (home to major aerospace and defense expansions), we’ve seen home values double in a decade. With Columbus already experiencing low housing inventory and steady appreciation, Anduril’s investment could push property values up by 30-50% over the next 5-10 years, depending on supply and interest rates.

The Interest Rate Factor

Speaking of interest rates, they’re higher than they were a few years ago, making borrowing more expensive. However, Columbus remains a seller’s market because demand is outpacing supply. Even with rates around 6-7%, home prices have held strong due to population growth and job expansion. The key for investors? Locking in properties now before values climb higher.

Final Thoughts

Anduril’s move is a game-changer for Ohio’s economy and real estate market. Whether you’re an investor looking for long-term gains, a homebuyer trying to get in early, or a landlord eyeing the rental market, this is an opportunity worth watching.

The bottom line? Growth like this doesn’t happen often, and those who position themselves early stand to benefit the most. If you’ve been waiting for a sign to invest in Ohio real estate, this might be it.

 2025 Real Estate Market Forecast for Columbus, Ohio

As we step into 2025, the real estate market in Columbus, Ohio, is poised for a year of both challenges and opportunities. With the latest data on sales price versus list price, days-on-market, and interest rates, we can paint a comprehensive picture of what to expect in the coming months. Additionally, the incoming Trump administration's policies and his nominee for Secretary of Housing and Urban Development (HUD), Scott Turner’s plans for addressing the housing crisis will play a significant role in shaping the market dynamics.

Sales Price Versus List Price

The Columbus housing market remains robust, with the median sale price for December 2024 at approximately $320,000 which was 8% above the median list price. These numbers are supported by high buyer demand and low inventory. This trend indicates a healthy market where sellers can expect to receive offers close to their asking prices.

Days-on-Market

Homes in Columbus currently average 30-40 days on the market which is normal for the season. This turnover rate is expected to decrease as we progress into 2025 and demand remains strong. A shorter days-on-market period benefits sellers by increasing the sale prices in the competitive market. For buyers, staying on top of new and coming soon listings will be a huge boon in the coming months.

Interest Rates

Current Interest rates are sitting around 7.05% on a 30-year mortgage with an expected decrease to around 6% this year. While these rates are higher than historical lows, they remain manageable and are anticipated to increase buyer activity. This relative stability is expected to encourage more homeowners to list their properties, softening price competition and ensuring consistent sales growth.

Market Outlook with the Incoming Trump Administration

The incoming Trump administration is set to bring significant shifts to the housing market. President Trump, who first gained fame as a real estate developer, is expected to push for tax cuts, deregulation, and business-friendly policies to spur economic growth. These initiatives could have a substantial impact on everything from mortgage rates to new home construction.

Secretary of HUD Nominee and Plans for the Housing Crisis

Trump's nominee for Secretary of Housing and Urban Development (HUD), Scott Turner, has pledged to make HUD programs more streamlined and efficient. Turner has highlighted the need to address the housing shortage and tackle the homelessness crisis, which saw an 18.1% increase in 2024. His plans include reforming HUD's massive portfolio of housing subsidies and addressing housing discrimination initiatives.

Residential Real Estate

The residential real estate market in Columbus is expected to see modest price increases, with home prices projected to grow by 2.5-3% in 2025. The market remains balanced, with steady demand and a stable supply of homes. The incoming administration's policies could further enhance market dynamics, making it an attractive time for both buyers and sellers.

Commercial Real Estate

The commercial real estate sector in Columbus faces unique challenges and opportunities. Office spaces continue to be under pressure due to the persistence of remote and hybrid work arrangements. However, industrial and warehouse spaces are experiencing a surge in demand. With $570 billion in commercial real estate loans maturing in 2025, the market will likely see increased refinancing activity, creating opportunities for savvy investors.

Investment Properties

Investment properties in Columbus remain a viable option for those looking to diversify their portfolios. The stable interest rates and high demand for rental properties make it an attractive market for investors. The incoming administration's focus on deregulation and tax cuts could further boost investment opportunities in the region.

In conclusion, the Columbus real estate market in 2025 is set to navigate through a dynamic landscape shaped by both local market trends and national policy changes. Whether you are a homebuyer, seller, or investor, staying informed about these developments will be key to making strategic decisions in the year ahead.

The LA Fires Effect on Insurance

Fires in Los Angeles and other disaster-prone areas primarily affect insurance prices in those regions. In Ohio, the impact is likely to be minimal and gradual, but it's always a good idea for homeowners to review their policies, ensure adequate coverage, and shop around for competitive rates if premiums increase unexpectedly.

Sources:

Columbus MLS Market Summary
https://www.houzeo.com/blog/ohio-real-estate-market/
https://www.realtor.com/news/trends/trump-presidency-housing-market-forecast/
https://ohiocashflow.com/understanding-the-ohio-real-estate-market-trends-and-predictions-for-2025/
https://rittermortgage.com/assessing-the-impact-of-trumps-presidency-on-the-u-s-housing-market/
https://apnews.com/article/scott-turner-nfl-hud-housing-secretary-trump-6c4c8b6bf79f59e6837b18772271ce06
https://realestate.usnews.com/real-estate/housing-market-index/articles/columbus-housing-market-forecast
https://www.hondros.com/resources/blog/ohio-real-estate-housing-market-forecast-2025/

Columbus Real Estate Market 2025 Forecast: Key Trends and Insights

The 2025 real estate market in Columbus, Ohio, is shaping up to be an exciting year of both challenges and opportunities. From the impacts of fluctuating interest rates on residential properties to the nuances of commercial and investment real estate, this forecast will also explore how property taxes and insurance costs factor into the equation. The incoming Trump administration’s potential regulatory shifts add another layer of intrigue to an already dynamic market.

Residential Real Estate

Sales Price vs. List Price:
The Columbus housing market remains robust, with the median list price at approximately $280,000, reflecting a steady increase over previous years. Sale prices continue to track closely with list prices, supported by high buyer demand and low inventory.

Interest Rates and Pricing:
Interest rates, expected to stabilize around 6% in 2025, are a critical factor for both buyers and sellers. While rates are higher than historical lows, they remain manageable. This relative stability is expected to increase buyer activity and encourage more homeowners to list their properties, softening price competition and ensuring consistent sales growth.

Days on Market (DOM):
Homes in Columbus currently average 29–31 days on the market, with the trend expected to hold or even decrease in 2025 as demand remains strong. Quick turnover rates can benefit both buyers and sellers, particularly in competitive neighborhoods.

Property Taxes and Insurance:
Ohio’s property taxes average 1.52% of assessed property value, slightly above the national average. In Columbus, homeowners can expect an annual tax burden of around $4,000 for a $260,000 home. Meanwhile, homeowners insurance premiums in the region average $1,250 annually, with variances based on property size, location, and risk factors. These costs play a significant role in affordability for buyers and should be factored into overall home ownership budgets.

Commercial Real Estate

The Columbus commercial sector has been under pressure from rising costs and shifting tenant demand. Office spaces remain a challenge due to the persistence of remote and hybrid work arrangements, though industrial and warehouse spaces are experiencing a surge in demand.

Loan Maturities and Financing:
With $570 billion in commercial real estate loans maturing in 2025, the market will likely see increased refinancing activity. Many property owners face higher interest rates, which could lead to distressed sales and investment opportunities.

Taxes and Insurance Costs:
Commercial property owners in Columbus pay property taxes averaging 2.0% of assessed value. Insurance premiums have risen significantly due to supply chain disruptions and natural disaster risks, averaging $0.10–$0.12 per square foot annually for industrial spaces. These rising costs are forcing some owners to reevaluate their portfolios, creating opportunities for savvy investors.

Investment Properties

Investors continue to flock to Columbus for its combination of affordable entry points and strong rental demand. Single-family rentals, multi-family units, and short-term rentals are particularly lucrative, supported by the city’s growing population and diverse economy.

Profit Margins and Costs:
While property taxes and insurance are critical considerations, investors in Columbus benefit from relatively low property prices compared to other major metros. Adjusting for taxes and insurance, rental yields remain attractive, with cap rates averaging 6%–8%.

The Trump Administration’s Anticipated Impact

President Trump’s incoming administration is expected to influence the Columbus real estate market through deregulation and policies aimed at reducing construction costs. Proposed measures, such as easing restrictions on federal land usage and streamlining permitting processes, could increase housing supply over time, potentially balancing prices. Additionally, tax incentives for developers and investors could further stimulate activity in both residential and commercial markets.

Conclusion

The 2025 real estate market in Columbus is primed for steady growth, with rising home prices and strong demand across sectors. While interest rates, property taxes, and insurance costs present challenges, they are balanced by new opportunities in development and investment. The Trump administration’s policies are likely to shape these trends, offering potential benefits for both buyers and investors willing to adapt to the evolving landscape.

For anyone looking to buy, sell, or invest in Columbus real estate this year, careful planning and a keen eye on market conditions will be key to success.

The Columbus, Ohio Real Estate Market: Opportunities for Buyers, Sellers, and Investors

The Columbus real estate market remains dynamic, offering opportunities for a variety of clients, from first-time homebuyers to seasoned investors. As a local real estate agent, I’m here to guide you through the current trends, provide actionable advice, and help you capitalize on this vibrant market.

For Buyers: Timing Your Purchase Wisely

Interest rates are still high, hovering above 7%, which can make financing a new home more expensive. However, Columbus offers affordability compared to many other metros, with a median home price of $291,000. If you’re waiting for rates to drop—potentially early next year—you may face more competition. Purchasing now could allow you to lock in current home prices before potential rate cuts reignite buyer demand【16†source】【17†source】.

For Sellers: Maximizing Your Home’s Value

Sellers remain in a strong position as inventory in Columbus is still limited. Homes continue to sell quickly, often at or above list price, with a median time of 35 days on the market. Pricing competitively and offering concessions like closing cost assistance can help attract motivated buyers. The sooner you list, the better positioned you’ll be to capitalize on current demand before potential market corrections in early 2025【16†source】【17†source】.

For Investors: Unveiling Columbus’ Real Estate Potential

Columbus offers excellent opportunities for real estate investment, whether you’re looking for long-term rental income or a quick turnaround through rehabilitation and resale.

Which Types of Properties Make Sense?

• Multifamily Homes: Columbus’ growing population and strong rental demand make duplexes and small apartment buildings a smart choice for long-term investors.
• Single-Family Homes: Rehab properties in desirable neighborhoods can yield high returns if flipped strategically.
• Commercial Real Estate: With Columbus’ thriving economy, investing in retail or mixed-use spaces in high-traffic areas can also be lucrative.

High-Growth Areas to Watch:

• Downtown and Short North: Ideal for long-term holds, these areas continue to attract young professionals with their vibrant culture, nightlife, and proximity to major employers.
• Franklinton: An up-and-coming neighborhood where rehab projects can yield substantial profits.
• Easton and Polaris: These areas offer strong potential for rental income with their mix of retail, dining, and business hubs.
• Southern Gateway and Groveport: Affordable properties with room for appreciation as infrastructure projects expand.

Navigating New Commission Rules

The National Association of Realtors introduced new commission transparency rules earlier this year, requiring agents to disclose commissions more clearly. While this creates a shift in how deals are structured, my goal is to ensure you have full clarity and confidence throughout the buying or selling process.

Why Choose Columbus?

Columbus’ thriving job market, cultural appeal, and growing population make it a hotspot for real estate. Whether you’re buying, selling, or investing, this city offers unparalleled opportunities. As your real estate agent, I’m committed to helping you achieve your goals, leveraging my expertise to ensure you make informed decisions in this ever-evolving market.

Ready to take the next step? Let’s connect and explore how I can assist you in your real estate journey!

Would you like to refine any sections or focus on specific details?

This summer is going to be hot, and I’m not just talking about the weather. The real estate market is heating up too! We had over 3,300 new listings hit the market in all of April. That seems like a lot until you compare it to May.

There were 1100 properties listed in this week alone (5/14-5/21), and with 61 more properties set to “Coming Soon” status in the last 24-hours, it suggests at least another 500 properties could come available by this week’s end.

Here are a few things I find interesting as I’m looking at the stats from the last 3 months.

The terms are defined below.

1.      In April 2023, the median list price was $34,000 higher than the median sale price. In April 2024, the gap widened to $50,000.

2.      The median active price from December 2023 to April 2024 was:

a.      December - $340,000

b.      January - $345,000

c.      February - $350,000

d.      March - $360,000

e.      April - $368,000

3.      The new median list prices and sold prices have gone up too from January to April (list/sold):

a.      December - $290k/$298k

b.      January - $300k/$289k

c.      February - $305k/$300k

d.      March - $320k/$310k

e.      April - $340k/$318k

4.      The Sold to List price ratios between January and April have been going up. In January, houses were selling for 96% of their list price. In April, it’s 99%.

5.      The average days on market peaked in February this year at 38 days and dropped to 29 days in April.

So what does all this mean? In a nutshell, it means that interest rates are driving the market. The current interest rates are at 7.01% to 7.575% for a 30-year fixed rate mortgage. Over the last few months, we was higher priced houses stay on the market longer and selling for less. However, with the summer coming, so is the selling season. Homes are beginning to sell closer to their list price and in the coming months, we’ll see 100% return, and perhaps even the 101% of list we saw last summer.

Do you remember when we said in December that “now” was the time to buy? Well, now is the time to sell. It is being predicted that interest rates will come down further as we get deep into the summer months and autumn. While they have begun their decline, with the election around the corner, we expect to see a steeper decline. Just how much they’ll come down remains to be seen. Nonetheless, people still need to move, and houses still need to sell.

 Terms:

 ·         Median - the middle price where half of the total is higher, and half is lower.  

·         The Active Median List Price defines the list price that is being carried over from the last month, or the median price that didn’t sell last month.

·         The New Median List Price - the price houses were being listed for that month.

·         The Sold Median Price - what all houses sold for in that month.

There has been a lot of talk by the news media, politicians, and even President Biden about the now settled lawsuit against the NAR (National Association of Realtors). Much of the talk about how agent commissions are decided has been incorrect. Agent commissions have always been negotiated and paid by the seller. This cooperative compensation structure gave buyers more flexibility in their purchasing power.  The commission was then recorded on the MLS for buyer agents to see when searching for homes for their clients.

This lawsuit makes two big changes to the commission structure. As stated by the NAR:

1. NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via the MLS, but they could continue to be an option consumers could pursue off the MLS through negotiation and consultation with real estate professionals.
2. NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide, and for how much.

Under this new structure, the commissions will not be recorded on the MLS meaning they’ll need to contact the listing agent to get the information. This could become an issue depending on how well the agents communicate. The most pressing issue with this lawsuit revolves around buyer’s ability to purchase a suitable home. This may get a bit detailed, so stick with me.

Under the cooperative compensation structure, it has been a foregone conclusion that the seller would pay all the commission, thus leaving the buyer without a need to think about it. If the buyer bought a $300,000 house and wanted to put 3% down, they would need $9,000 in addition to closing costs. Because of this lawsuit, the buyer will be required to sign an exclusive buyer representation agreement with their agent. In that agreement, the buyer will need to negotiate the commission with their agent in case the seller isn’t paying. So, instead of needing just the $9,000 downpayment, the buyers also will need to commit to a commission amount. Regardless of the negotiated commission amount, the buyer will need to have that much more over their downpayment and closing costs available which could reduce their purchasing power.

The alternative to this is, of course, not hiring a buyer’s agent. It has never been advised to go into a legal transaction without representation, even less so under this new rule. Most buyers have erroneously believed the seller would lower their price if they didn’t need to pay the buyer’s agent. The truth is that the listing agent either lowers the total commission compensation or keeps the entire amount and buyer still pays full price. Under this new rule, however, if the seller isn’t paying the commission, an agent may be able to negotiate a lower price so that the buyer can afford the extra expense.

The new rules are set to go into effect in mid-July. At first, very little will change. Smart listing agents will explain to their sellers the negatives to not offering cooperative compensation, and savvy buyer’s agents will offer alternatives and additional options to their buyers. I do, however, look for these new rules to become more of a problem next year due, in part, to inflation and other reasons yet undefined.

The March 2024 average home sales price in Ohio was $275,500 for 10,700 homes sold. The average price in Columbus is currently $243,838. If you got my market update from last month, you may be wondering at the roughly $125,000 price discrepancy where the average price in Columbus was $374,000 and that prices were going up. Now, it appears they’re going down. Was I wrong, or was the data wrong? The fact is, it depends on where you look and who you ask. It’s the same with interest rates.

The internet is rife with information, some of it is relevant and some is not. Let’s look at housing prices. The average price of $243,838 in Columbus is sourced from the Ohio Realtor’s website. However, if you look at this week’s Columbus Realtor’s newsletter, it says the median price for Central Ohio in March was $310,000. Redfin says Columbus prices averaged $267,500 in March, Rocket Homes says $278,846, Google indicates it’s $299,300 for Central Ohio, and then the info provided in our last market update stated $374,000. So, why are they all different?

Without going into the long story side of it, though I will if you ask me to, the key to these prices is in the description. Is the average for every home sold in Columbus or Central Ohio, and is it for the entire month of March or something more specific? In the case of our email, the data was specific to a certain home type in Columbus and its suburbs. And was based on the average sales price, not the list price. That’s why it’s so high. When a site says “Columbus” it typically means, the city and suburbs. The location, “Central Ohio” is more arbitrary. That description can include or exclude locations to either meet an expectation or the narrative the article is trying to tell.

It's similar with the interest rates. Depending on which website you look at or which lender you talk to, the interest rates can swing more or less by a quarter (.25) to several percentage points either way. The way I understand it is, and I’m not an expert on loans, the rate set by the Federal Reserve is an arbitrary suggestion they base on inflation and governmental prompting. The lending institutions can set their rates base on the Federal suggestion or not - kind of like an MSRP. The rate is adjusted periodically, with no set timeframe, and then lending institutions decide which rate best fits their needs, based loosely, of course, on the Federal suggestion. If a bank has too many home loans out this month, then they may set their mortgage rate on the high side. Likewise, if a credit union wants more loans, it can set its rate lower than suggested. Like the term, “Central Ohio,” the lenders mortgage rate is arbitrarily based on factors it controls.

So, what should we do to get the best information? If you want to know the median sales price for a location you want to buy in, skip the generalizations of, “Columbus,” or “Central Ohio,” and search the specific locations using a site like Zillow or Realtor.com. For mortgage rates, Nerd Wallet offers the ability to compare the rates of several national institutions. You can also compare the ‘Rent vs. Buy’ option to find out which is more equitable for your budget. If you prefer loan officers you can see, we have several lenders we’ve worked with in the past that can help you with a loan or even credit repair if its needed. If you want to sell a home, check out the Home Valution page on our website. And of course, since I’m biased on this, you can always reach out to me, I’ll be glad to help you anyway I can.